Multinational retailers can enter India
29 November 2011
Large foreign retailers will be allowed to open branches in India. This is teh result of a law change concerning ownership. From now on, multinational companies like Walmart and Tesco are able to own 51 percent of a branch in India, which was allowed before.
This reports the Dutch paper Financieel Dagblad. The less stringent rules allow supermarket chains to set up subsidiaries in India. Until now only Indian wholesalers could be involved with foreign multinationals. Direct sales to consumers was not allowed. As a result of this law, foreign retailers were setting up partnerships with Indian chains.
Tesco is satisfied with the decision in India. "Foreign investment in retail is good news for consumers and businesses in India. We are awaiting further details of the decision," says the British supermarket giant.
In the Indian politics there are different opinions about the decision. Opponents say that local retailers will be wiped out because of the competition of the big international chains. Proponents, such as the federation of retailers in India, say that Indian consumers will benefit from lower prices, which is a result of increased competition.