New govt unlikely to be positive for retail industry

Tags: Retail, Economy
A new government is unlikely to bring any cheers to the domestic retail industry unless it spells out its foreign direct investment policy for the sector in which investors are holding back investments due to lack of clarity, industry experts have said.

"Everyone is talking about a stable government and growth prospects of the country. But I do not feel there is any good news for the retail sector, especially when there is no clarity on foreign direct investment in the sector," DTZ India Chief Executive Anshul Jain said.

He said due to lack of clarity on the policy front, especially on allowing FDI in the retail sector, international investors are not ready to invest.

"The manifesto of BJP has clearly said it will not allow FDI in multi-brand sector. Unless the government takes certain favourable decisions on this, the growth of the sector is unlikely," he added.

Investors, both domestic as well as international, are also not keen on investing in developing retail real estate, Jones Lang LaSalle Country Head Anuj Puri told PTI.

"Since 100 per cent FDI is allowed in development of commercial properties according to norms, the investor has to do all the ground work, including getting all the approvals for building layouts and infrastructure facilities among others. Investors fear the challenges that come along with this.

"Besides, there is no guarantee about getting the right retailers and are sceptical about returns. Therefore, they are unwilling to take the risk," he said.

Similar is the case with domestic private equity investors, who are forced to look at other options in the real estate sector.

"There was a time when we witnessed huge investments in mall development from domestic players. But due to the risks like delay in approvals, rising cost and low returns, even they are cautious," Puri said.

"We do not see any relief to the sector at least in the near future. It is only if the existing norms are tweaked that the industry will move on the growth path," he added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Faith is the opium of the masses, so Indians get addicted

    India is a nation of 1.27 billion. Let that number sink in, with all its zeroes. That’s a lot of people.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

M S Swaminathan

Public good research in agriculture

Public good research in agriculture is designed to promote risk ...

Zehra Naqvi

To hell and back

Here is a book that makes you wish there were ...

Bubbles Sabharwal

When your real & reel life heroes are the same

ALL the world’s a stage and we all are merely ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture