FDI in retail: Anand Sharma says foreign retailers must invest in new back-end infrastructure
NEW DELHI: Commerce and Industry Minister
Anand Sharma has said that foreign supermarkets wanting to enter India
will have to make fresh investments in new back-end infrastructure and
not acquire existing facilities of local companies. This would dash
hopes of global retailers such as Walmart, which might have planned to
buy out franchisee Bharti Retail's back-end infrastructure along with
the front-end Easy Day stores for speedy access to the Indian consumer.
Sharma, widely regarded as the architect of the policy, also clarified that the cost of land and real estate will not be included in the mandatory $50-million investment on infrastructure and logistics over a three-year period - one of the conditions foreign supermarkets have to meet to enter India.
"It is an additionality. Investments have to be in new back-end infrastructure, not in acquisition of existing ones," Sharma said. Back-end infrastructure typically includes cold chain, warehouses, processing plants and logistical support, and is critical for the smooth functioning of a retail firm.
Sharma, widely regarded as the architect of the policy, also clarified that the cost of land and real estate will not be included in the mandatory $50-million investment on infrastructure and logistics over a three-year period - one of the conditions foreign supermarkets have to meet to enter India.
"It is an additionality. Investments have to be in new back-end infrastructure, not in acquisition of existing ones," Sharma said. Back-end infrastructure typically includes cold chain, warehouses, processing plants and logistical support, and is critical for the smooth functioning of a retail firm.
Birendra kumar
pgdm 2nd
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