A year since India reduced foreign investment barriers to its retail sector to spur flagging economic growth, confusing rules and political uncertainty are keeping overseas supermarket giants away, analysts say.
Last month, US giant Walmart sought more government clarifications on FDI, having earlier said it was unable to fulfill sourcing guidelines stipulating 30 percent of products must come from small-scale industry. "India is an important market for us and we continue to study the implications of the new FDI policy on our business," a Walmart spokeswoman told AFP.
In September 2012, Walmart said it aimed to launch its first retail store in India within the next 18 months to two years but has made no recent mention of the target. The firm, like French supermarkets Carrefour and Britain's Tesco, operates in India as a wholesaler with local partnerships but is yet to set up its own stores.
Devangshu Dutta, head of retail consultancy Third Eyesight, said, "regulatory complexity" was an issue for brands "evaluating the costs against benefits" of entering the country. The inability to woo big foreign firms is a blow for India, keen to attract outside investment to help boost its sliding economy.
The central government has left it to each State to decide whether foreign retailers can set up shop - and so far only 11 out of 28 states have expressed a keenness for overseas chains.
"The current FDI policy should be discarded, it's ill-informed and ill-advised," Technopak chairman Arvind Singhal told AFP. "The government could have done so much more. We've muddied the waters," he said.
