India's free trade agreement (FTA) on services with the 10-member Association of Southeast Asian Nations (Asean) is still in limbo, as three members - Thailand, Indonesia and the Philippines - are yet to ratify the deal. While Thailand and Indonesia are demanding unconditional access to India's multi-brand retail trading segment, the Philippines appears to be scared of India's information technology (IT) sector.
The Indian Bharatiya Janata Party manifesto decision to oppose foreign direct investment in supermarkets has made the sector more wary. The United Progressive Alliance's policy to allow 51 percent FDI in multi-brand retail in September 2012 could be reversed if the BJP comes to power at the Centre.
International supermarket chains like Walmart and Carrefour had already stopped hiring for their Indian businesses and were just about spending on renovation and repair to keep existing facilities in shape, sources said.
India's opposition Bharatiya Janata Party, widely tipped to form the next government, said in its election manifesto on Monday it would encourage foreign direct investment but appeared to close the door to global retailers eyeing the country.
On foreign investment, it said: "Barring the multi-brand retail sector, FDI will be allowed in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialised expertise."
The capital structures of most of the retail companies in India are expected to remain stressed due to slower inventory and pressure on operating margins, said a new report.
"The working capital requirements of the retailers may increase due to slow moving inventory. Traditionally, retailers have relied on debt to fund their expansion plans, which has led to high interest out go and reduced free cash flow and moderate capital structures," said a report by CARE.
While the controversy over allowing or banning foreign direct investment (FDI) in multi-brand retail trading (MBRT) is keeping every political party on its toes before the coming Lok Sabha elections, foreign multi-brand retailers seem to be avoiding India, at least for now.
Commerce and Industry Minister Anand Sharma had claimed that after Tesco, there would be one more foreign retailer entering the MBRT space. However, the claim did not materialise.
Aided by a drop in food prices, India's Consumer Price Index (CPI)-based inflation fell to 8.1 percent in February, the second-lowest since the index was launched in 2012, showed data released on Wednesday. Only for January 2012 did CPI-based inflation stand at a lower level (7.65 percent).
In February 2013, inflation stood at 10.29 percent; in January this year, it was 8.79 percent.
This year, the season of retail discounts had begun early in India. But now, it seems the strategy has backfired. Used to discounts, shoppers of apparel and fashion wear aren't willing to spend when prices aren't slashed anymore.
While footfalls have fallen after the long period of discounts, retail chains are being forced to continue selling discounted merchandise, as new stock is yet to arrive.
We have heard that for those who love, age sex and caste is no bar. However, a recent study says that money is also no bar. Despite the global economic slowdown, companies are ready to cash in on Valentine Day's an estimated INR18,000 crore (INR180 billion, USD2.89b) with record sales of popular gift articles like flowers, jewellery, chocolates, toys, readymade garments, mobile phones, electronic gadgets, wrist watches etc, according to an ASSOCHAM report.
The Indian state of Rajasthan has barred foreign direct investment in supermarkets, an ominous sign for global retailers who covet India's vast but fragmented retail sector if the country's main opposition Bharatiya Janata Party (BJP) comes to power nationally in upcoming elections.
The BJP is considered to be more investor-friendly than India's ruling Congress party but opposes foreign direct investment in supermarkets because of its impact on small shopkeepers. It unseated Congress in Rajasthan's state elections in December.
With a view to provide job opportunities to persons with disabilities, Kishore Biyani-promoted Future Group plans to have nearly 5 percent of its workforce from this segment in the next three years.