WASHINGTON, DC: The Union Minister of Commerce and Industry Piyush Goyal firmly stated on Thursday that India will not alter its stance on multi-brand retailing.
He emphasised that such a move could jeopardise the viability of small, family-run businesses, commonly referred to as “mom-and-pop” stores. Goyal’s comments were made during a discussion at the Centre for Strategic and International Studies think tank.
Goyal acknowledged that while India is open to various economic reforms to accelerate growth, multi-brand retailing remains off the table.
Lessons from US
He noted that the US has witnessed significant consequences from large retail chains, which have led to the decline of many small businesses.
“America has suffered the consequences of big tech and large retail leading to the annihilation of mom-and-pop stores,” he said, underscoring the need to protect India’s vast network of small retailers.
Highlighting India’s unique context, Goyal pointed out that the country has nearly 100 billion small shops, crucial for local economies and community services.
He expressed a commitment to integrating these stores with technology, encouraging them to adapt to e-commerce without changing the existing rules for foreign investments in retail.
Remains open to foreign investments
Goyal also mentioned that India remains receptive to foreign investment in various sectors, including 100 per cent foreign ownership in defense and space.
He reassured potential investors that while safeguards exist to prevent issues like money laundering, the environment for investment in India is generally open and conducive.
“We want our small retailers to thrive and be able to compete effectively,” he affirmed, reflecting the government’s intent to support traditional retail while navigating the challenges posed by e-commerce.
Overall, Goyal’s remarks reinforce India’s cautious approach to multi-brand retail, prioritizing the welfare of small businesses while remaining open to other forms of foreign investment.
Balancing act
Referring to the news about the imminent entry of the French retail chain Carrefour into India, a government official told businessbenchmark.news that the entry of Carrefour does not contradict Goyal’s statement about protecting small retailers.
“Instead, it highlights a nuanced approach where foreign companies can operate within the existing framework while promoting local economic growth. Carrefour’s presence can enhance competition and improve consumer choices without necessarily undermining small retailers,” he added.
