For now invest in back-end infra, Sharma tells Wal-Mart, Tesco

Prakash Chawla

Davos, Jan 29 (PTI) India has told global retail chainslike Wal-Mart and Tesco that they should invest in the back-end infrastructure, even as the issue of opening multi-brandretailing to foreign direct investment (FDI) is under "activeconsideration" by the government.

The message was conveyed by Commerce and IndustryMinister Anand Sharma to Wal-Mart CEO Mike Duke and TescoChief Executive Terry Leahy here on the sidelines of the WorldEconomic Forum meeting.

"Multi brand can only come when the back-endinfrastructure is created, that is where the farmer will getthe remunerative prices at the door step.

In addition, tens of millions of jobs will be created.

You cannot say that I will have a front end in the absence ofa back-end infrastructure," Sharma told reporters here.

Asked over the concerns of the retailers over policydelay on FDI in multi-brand retail, he said, "nobody is sayingthat the entire value chain will not be created. For India,investors will have to work out their individual model".

Sharma said his broad message to them was: "that everyinvestment is an act of trust...Believe in India and you willnot go wrong."

Asked how long will it take to take a decision on the FDIin retail, he said there cannot be any timelines.

In July last year, the Indian Government had floated adiscussion paper on liberalising the politically-sensitivemulti-brand retail. The sector employing over about 33 millionpeople is dominated by mom and pop stores.

The minister said the investors need to devise India--specific model and replicate.

Besides, it was pointed out to them that there has to bea minimum investment in back-end and "job creation and atleast half of them in the rural areas," he said.

While FDI in multi-brand retail is prohibited in India,foreign investment in single brand retail -- since beingopened in April 2006 -- is about Rs 900 crore, said the paper,on which comments are invited by July 31.

Pointing that India was losing agri products, fruits andvegetables to the tune of Rs one lakh crore annually, thediscussion paper said that establishment of cold chains andback-end infrastructure could cut down the losses by more thanhalf.

As per the Indian Planning Commission, infrastructure forthe farm sector such as cold chain would need an investment ofRs 64,312 crore.

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