UPDATE: INDIA: Aditya Birla backs plan to ease retail rules
The chief executive of Indian retailer Aditya Birla Retail has said he supports the idea of opening the country's retail sector to more foreign investment.
Speaking to just-food, Thomas Verghese said the move, which has been recommened by a key government panel, could mean more money to improve the country's retail infrastructure.
"Opening up FDI will bring capital … which will help in building supply chains and commercial real estate. This might provide much needed capital to Indian retail companies to improve backend infrastructure," Verghese said.
The Indian government's Committee of Secretaries has recommended that overseas retailers be allowed to own up to 51% of multi-brand retailers.
At present, India allows foreign companies to own 51% of retail stores selling one brand. The country also allows multinationals full ownership of wholesale stores.
The recommendation will not immediately open the doors to global retailers like Wal-Mart Stores, Carrefour and Tesco. Any plan to relax the restrictions still requires the approval of India's Commerce Ministry and then the country's Cabinet.
Verghese said Aditya Birla Retail, which runs ten hypermarkets and 600 supermarkets in India, is set to open up to over 130 stores in the country over the next two years.
The company plans to add between 10 and 12 outlets to its More.Megastore hypermarket chain and 100 to 120 supermarkets under its More. banner.
Verghese said: "We have built a sustainable customer enterprise and now we want to grow faster based on that experience."
He said Aditya Birla's s expansion reflected the "long-term growth potential of modern retail in this country". New hypermarkets will be located in India's largest 20 cities, while supermarkets will be concentrated in nearby regions, utilising group distribution centres.
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