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  • 07 Dec 2011 6:20 PM | Elsa Fairbanks (Administrator)

    India's ruling Congress Party has confirmed that plans to allow more foreign investment in the country's retail sector have been suspended.

    Speaking in the Indian parliament, Finance Minister Pranab Mukherjee gave official confirmation that the reforms, which have led to fierce opposition among parts of India's political elite, were not going to be forced through.

    He said: "The decision to permit 51% FDI in retail trade is suspended until a consensus is developed through consultation among various stakeholders."

    It emerged over the weekend that the Indian government was planning to put its reforms, announced two weeks ago, on hold. 

    On Saturday (3 December), Mamata Banerjee, chief minister of the state of West Bengal and leader of the All India Trinamool Congress party, the second-largest party in India's ruling coalition, said the government had suspended a decision on the reforms "until and unless there is a consensus of all parties on the matter". Today, however, was the first official confirmation that the reforms were being suspended.

    Mukherjee said the Indian government would now consult all stakeholders, including the chief ministers of all states and political parties, before going ahead with the policy.

    Under the plans, announced 24 November, foreign companies would be able to own 51% of multi-brand retail stores. The Indian government claimed the reforms would create jobs and modernise the country's supply chain. As the ruling was made by the cabinet, it did not to go to a parliamentary vote.

    Opponents of greater foreign investment, including key government allies like Banerjee, were furious about the move and began a series of protests that caused parliamentary proceedings to grind to a halt. They claim giving retailers like Wal-Mart Stores, Tesco and Carrefour greater access to Indian's retail market would cripple local businesses.

    Sudip Bandhopadhyay, leader of the Trinamool Congress, which strongly opposed the FDI reforms, told the Indo-Asian News Service after the meeting: "It has been accepted. Whatever you may want to call it, holdback or rollback, it is not being implemented."

    Some opposition politicians said it signalled the death knell of the proposals.

    Source - just-food.com

  • 29 Nov 2011 6:08 PM | Elsa Fairbanks (Administrator)

    Full text of Statement: http://cdn.hm-treasury.gov.uk/autumn_statement.pdf

    Food and drink – The Government to launch a food and drink export action plan in January 2012, including development of a cross-Government strategy on removing animal health trade barriers in key markets such as China and Russia; regional road-shows for prospective exporters; a food and drink business ambassador; and steps to reduce blockages to UK food exports. In addition a summit will be held in March 2012 to boost innovation in small agri-food businesses.

  • 28 Nov 2011 4:46 PM | Elsa Fairbanks (Administrator)

    Multinational retailers beware. For all the headlines last week, the passage into India's fledgling and potentially lucrative retail sector is likely to be anything but smooth.

    News that the Indian government plans to relax restrictions on foreign investment in the country's retail industry would have initially been greeted warmly in boardrooms at the likes of Wal-Mart, Carrefour and Tesco.

    New Delhi's decision to, for example, allow overseas retailers to take a majority stake in a supermarket chain in India does, on the face of it, present a very appealing opportunity for Western retailers keen to tap into the country's growing and ever-more wealthy middle class.

    However, the devil is in the detail. A retailer that wants to set up a supermarket chain in India will have to meet certain conditions, including a stipulation that it must invest US$100m - and half of that must be spent on infrastructure. Companies will also be forced to buy 30% of produce from small and medium enterprises and will only be able to establish stores in cities with a population of one million people or more.

    That said, the most critical consideration for would-be investors is the fact that the Indian government's reforms have been met with fierce opposition in some parts of the country. Individual states in India's federal political system will be allowed to ignore the new regulations if they wish - and there has already been defiant statements from some local politicians that overseas retailers will not be allowed entry to their markets. Opposition leader Uma Bharti has reportedly even threatened to torch any Walmart store that may open in the country.

    It, therefore, seems there is a long way to go before we see a network of Tesco supermarkets in India. And, from the public reaction so far - a spokesperson from Carrefour last week pointed out that "it's still an ongoing process" - Western retailers are fully aware of the potential obstacles that lie ahead.

    India's planned retail reform was the big news story in a week dominated by developments at a number of global retailers. One retailer that already has a presence in India through its wholesale network - Metro Group - was also in the spotlight with the appointment of its new CEO. Finance director Olaf Koch will take the top job by next October and, after the uncertainty at the top of the retailer in recent months, investors will be pleased that a sense of normality is set to to return to the German retail giant. However, there are a number of challenges that lie ahead for Koch, including a need to revitalise sales at the company and successfully sell department store chain Kaufhof.
  • 25 Oct 2011 10:30 AM | Anonymous
    Book your place now at the FDEA Network Forum event to take place on 15 December 2011 at the London Landmark Hotel.  A one day event for food and drink exporters with keynote speech from DEFRA Minister Lord Taylor.

    Download the event flyer here
    or go the events page for more details and to book online.

    A one day event for the UK food and drink exporting community with presentations from leading exporters, market updates on China, food and drink trends worldwide, unrivalled networking with fellow exporters, a superb all British banquet lunch and more.

     
  • 25 Oct 2011 9:00 AM | Anonymous
    FDEA is running a Taste of Britain showcase at the FHC Shanghai exhibition in November with local acitivity including a media and trade reception, store tours, market briefing and a stand at this show for imported products.
    More details see www.tasteofbritain.cn

    Companies joining this comprehensive visit and exhibit programme are:

    Burts Biscuits & Cakes
    The Celt Experience
    Delamere Dairy
    Deliteazers
    EBLEX & BPEX (English meat)
    Lizi's
    Llanllyr Source Water
    Macleans Highland Bakery
    Premier Foods
    Somerdale International
    Ramsden International
    Suma Wholefoods
    Typhoo Tea
    Tyrrells Potato Chips
    Wensleydale Dairy Products


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