After Tesco’s application to open multi-brand retail stores in India in partnership with Tata’s Trent, other major global players are expected to follow suit, Commerce and Industry Minister Anand Sharma said on Thursday.
'We do hope that the other majors in this sector will also come, looking at the potential of the Indian market. The fact that they are coming to a country of 1.25 billion, and a country which is the largest producer of food grains, fruits and vegetables...,' he told reporters here.
Surely, there is benefit for the investors and it is very clear that when others identify their domestic partners or Indian partners, they will come soon, he added.
The UK-based Tesco has applied to the Department of Industrial Policy and Promotion (DIPP) for investing $ 110 million to engage in multi-brand retail trading in partnership with Trent Ltd.
This is the first application for multi-brand retailing since the government allowed 51 per cent foreign direct investment in the segment in September last year. It comes two months after Wal-Mart Stores and Bharti Enterprises said they would go their separate ways for retail operations in India.
Mr. Sharma said investing in India is a business decision and 'those who have to invest, they too take time to firm up the business plans'.
He added: 'We saw that in the single brand also.
Initially, there was this talk that why people have not come but more than $ 3 billion investment proposals have come in the single brand alone. IKEA took almost a year...but they have finally taken the decision to come and that is the biggest investment.'
On FDI in the pharma industry, Sharma said the government would not change FDI cap in the sector. 'We are very clear that when it comes to both the greenfield and brownfield, 100 per cent FDI is allowed. We are not changing, in any case.'
He added however that in case of brownfield (existing firms), particularly where critical verticals are concerned, there are certain conditionalities that have been put. '..also in the shareholding structures, or the agreement. And those conditions will have to be met when FDI is proposed for acquisition purposes beyond 49 per cent, but rest there are no restrictions,' he said.
Earlier, he met George Nakayama, President and CEO of Daiichi Sankyo, Japan.