New York, Sep 24 (UNI) Amidst India's retail boom, the government has made it clear that vast retail market will not be open to foreign investors any time soon with Commerce Minister Kamal Nath stating that FDI will not be able to replace the unorganised sector in the retail area.
''It is not (about allowing) FDI, the issue is that of large versus small retailers,'' Mr Nath said at the first 'Pravasi Bharatiya Divas New York 2007', last evening.
The ministers comments come close on the heels of the Uttar Pradesh government ordering the closure of corporate-run food retail stores citing law and order problems, and stiff opposition to retail chains even within Delhi.
Asked if this meant large retailers would have to be prepared exit a market which is estimated to be worth 330 billion dollars, Mr Nath said ''That is not under my ministry. Ask the Consumer Affairs Ministry.'' The minister also said the government would only allow incremental growth in the sector.
Mr Nath said he had informed Wal-Mart, the US-based retailer, which recently entered into a tie-up recent with Indian company Bharti Enterprises, that it could get more Business-to-Business (B2B) work in India for its back-end operations.
According to estimates, organised retailers in India account for about three percent in the retail sector while the rest of the sector comprises small-time traditional grocery shops.
He also referred to the possibility of some private equity groups and others setting up a fund for infrastructure project. The minister acknowledged that there have been certain delays in infrastructure and other sectors in this connection.
The reference was to the five billion dollar fund proposed to be set up by Citigroup, Blackstone group and others for financing infrastructure units.
Mr Nath also asked foreign investors to bear with the government if there were any delays in clearing investment proposals, as it was facing most situations for the first time.