7th APRIL 2015 - Vol.XXXVIII No.018
Business News

India move to create jobs

NEW DELHI: India yesterday said the plan to open its vast retail sector to global supermarket chains would create up to 10 million jobs over three years after the cabinet approved the long-awaited reforms.

The pledge by Commerce Minister Anand Sharma came after heated opposition protests stopped the government announcing details in parliament about its move to relax foreign ownership rules for retailers such as Wal-Mart.

The changes would push India further towards a modern consumer society but they are contested by opposition members who fear large supermarkets will kill small family-run stores.

The reforms will "give a fillip to job creation," generating up to 10m jobs over a three-year period, in such areas as packaging, canning and transportation, Sharma said.

The government plan will open up the sector, worth an estimated $470 billion in annual sales, to allow global firms to hold a 51 per cent stake in multi-brand retailers. The cabinet also raised the foreign investment cap to 100pc from 51pc for single-brand retail operations such as Gucci, Nokia and Reebok.

"This has been a long time coming, and will be welcomed," consultancy firm Technopak Advisers head Arvind Singhal said.

But as part of measures to pacify opposition and protect family shops, foreign multi-brand stores will only be permitted in cities of more than one million people, and India's 29 states will be able to decide whether to allow the retail behemoths to operate on their turf.

Currently, family-run stores account for 90pc of the sector, the second-largest employer after agriculture in the country of 1.2bn people.

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