MEMBERSHIP
BLOG
MAGAZINE
EVENTS
ACADEMY
RESOURCES
ABOUT

Success stories
COMMUNITY & CONNECT
PROCUREMENT STRATEGY
CATEGORY INTELLIGENCE
BACK

India opens for business, but watch out


11-Jan-12 10:49

Back in late November, the Indian government announced plans to open up its $450bn retail sector to foreign companies before, a few days later, backtracking and putting them on hold after strong opposition from politicians, concerned about the impact on local traders.

 

The plan was to allow foreign companies the ability to invest up to 51% in multi-brand retailers, and increase to 100% the level of foreign direct investment allowed in single-brand retailers.

 

However, the government has now ratified the foreign direct investment rule, which will open up the market to the likes of Ikea, Starbucks and Marks and Spencer. One requirement made of them is that they have to source 30% of goods from local companies.

 

With companies looking for new revenue streams and local souring high on the agenda at the moment, you would think this would be met with jubilation, but put the champagne on ice because it might not be that straight forward.

 

The government has insisted that the local companies that must be used are those that have investments of no more than $1m in plants and machinery which seems like a very low level considering the scale of the operations that will be looking to invest.

 

Government officials have said that, as yet, no concerns had been raised and if they were, they would look again at investment levels.

 

"No such issues cropped up during our stakeholder meetings. Let these brands enter the country first, and if they have some genuine problems, we will tackle them," said department of industrial policy and promotion secretary PK Chaudhery, according to India’s Economic Times.

 

With the monetary rewards on offer it may be that the benefits outweigh any potential concerns but one thing is for sure, the procurement functions of businesses looking to take advantage of the growing Indian market will be doing their homework on supplier networks.

 

Tim Burt is premium content writer for Procurement Leaders. Subscribe to the magazine click here.


Tim Burt Tim Burt is Deputy Editor at Procurement Leaders. His main areas of interest are risk, global sourcing and the commodity markets on which he writes regular coverage. Follow Tim on Twitter: @tburt85

 
Subscribe to feed Subscribe to feed
Rating (0 vote/s)
 

SUBSCRIBE TO NEWSLETTER


FREE 

SUPPLEMENTS

PREDICTIVE INSIGHT TO FUEL WORLD-CLASS DECISIONS

Unique, high value research and analysis provides CPO's with the information they need to make the right strategic choices.

FREE 

WHITEPAPERS

OFFERINGS

 

ABOUT

MEMBERS

FOLLOW US

AWARDS

MEMBERSHIP

 

COMMUNITY

 

MAGAZINE

 

EVENTS

 

ACADEMY

 

RESOURCES

CONTACT US

 

ABOUT US

 

ADVERTISE WITH US

 

FREQUENTLY ASKED QUESTIONS

 

WHAT'S NEW

SIGN IN

 

BECOME A MEMBER

 

REQUEST A DEMO

 

JOB SEARCH

LINKEDIN

 

TWITTER

 

GOOGLE+

 

RSS

 

NEWS ARCHIVE

Procurement Leaders Awards

TERMS OF USE . PRIVACY POLICY . COOKIE POLICY

© Sigaria Ltd and its contributors. All rights reserved. www.sigaria.com

Sigaria accepts no responsibility for advice or information contained on this site although every effort is made to ensure its accuracy. Users are advised to seek independent advice from qualified persons before acting upon any such information.