Perhaps when provided with this new perspective, even State Governments that are politically adversarial to the Central Government, but of otherwise progressive states like Karnataka and Tamil Nadu, where modern retail struck its first roots, will be more inclined to notify their own versions of the Retail rules and perhaps choose to restrict Food Retail while permitting Non Food Retail to proliferate as that has no political minefields to be negotiated. For most International Retailers, the markets of these two States and Andhra Pradesh are seen to be the most attractive as modern Retail has been in practice here since 1996, due to which the customers are quite sophisticated and pre-accustomed to the USP of Modern Retail. Also, as they are progressive States, their denizens have higher purchasing power, and also enjoy a relatively politically stable and generally peaceful business oriented atmosphere. I wouldn’t be very surprised if many International Brands choose to postpone their entry into India until these crucial States notify their version of the rules. This would be particularly true for Karnataka, and it needs to look at this very closely and very seriously as many international retailers would be keen to be headquartered in Bangalore, considering the fact that it is the most preferred city for expat managers. Thus, if Karnataka chooses political exigency over sound policy and economics, they will stand to lose a huge opportunity in the form of being the repository for all the investment and being the beneficiary of the tax revenues accruing out of such business entities.
Business and politics aside, I for one, truly believe from the bottom of my heart that modern retail will genuinely and substantially benefit India, especially with the rules mandating a 50% quantum of investment in the setting up of Retail Backend Infrastructure. I draw attention to another article of mine, where I have written about the need for the betterment of the agricultural infrastructure, which I feel large retailers will be most willing to undertake. I do hope that someone out there is listening….