‘Starbucks’ retail plans stuck in policy carridors

[Image]Retail plans of Starbucks, the Seattle based, biggest coffee shops chain in the world, which had reprtedly tied up with Pantaloon Retail, to set up a chain of retail outlets in India, have got stuck in policy carridors of the government of India for want of adequate information. It is not clear as to whether apart from coffee shops, Starbucks also wants to set up a chain of restaurants in India? said industry secretary Ajay Dua.

“We have sought more details on the nature of the business they want to do and the nature of arrangement they want to have. Once we have their response, and if we are satisfied, we will move the proposal to the Foreign Investment Promotion Board for clearance,” added Dua.

Currently, the government policy allows majority equity of up to 51% in single brand retail, although for past few weeks Commerce Minister is signaling the possibility of allowing majority stake in multi-brand retail where product basket does not affect small shop owners. The government is looking at attracting foreign retail investors by framing attractive policy guidelines for them as until now only nine single brand retail proposals have been approved by the government.

It may be interesting to recall that Bharti and the world’s biggest retailer Wal-Mart have circumvented the policy guidelines by deciding to set up a joint venture for back-end retail operations.

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