The Indian government finally approved a plan last week to allow international firms such as Wal-Mart to own 51 percent of multibrand retail stores. In an email interview, Pravakar Sahoo, an associate professor at the Institute for Economic Growth in India, discussed India’s retail opening.
WPR: What concrete changes will the retail opening bring to India's economy?
Pravakar Sahoo: The approval of 51 percent foreign direct investment (FDI) in multibrand retailing, which was initially approved by the Cabinet in November 2011 after two years of deliberation but suspended due to the ensuing political furor, is a big step. It will change the way business is conducted in India, particularly in a country where the middle class population is growing and expected to reach 30 percent of total population soon. In particular, the new policy will improve backend supply chains in the country and also help millions of farmers, as the big retail stores are expected to buy fruits, vegetables and food products from the nearby villages and towns.