SME industry welcomes 100% FDI - CII Survey

A Survey on the Impact of FDI in retail on SME undertaken by the Confederation of Indian Industry (CII) confirms that SME industry, by and large, supports 100% FDI in single brand retail and expects earlier and speedier implementation of 51% FDI in multi-brand retail and notification to that effect in consideration of the overall benefits for industry and business.

The government’s decision of mandatory sourcing of a minimum of 30% from Indian micro and small industry will help SMEs to achieve higher  growth in sales, size of the industry, capacity addition, increased contracts/ orders,  qualitative improvements and branding of the products, technology upgradation, employment etc. “India’s growing retail boom is a success story. 51% FDI in multi-brand retail and its early implementation would give a major boost to the all round growth of organized retail in the country having substantial positive impact on the growth of SMEs” says Chandrajit Banerjee, Director General, CII.

The Confederation of Indian Industry (CII) has recently undertaken a comprehensive survey on Foreign Direct Investment (FDI) in retail on SME sector, in particular to assess the impact of the government’s proposal to allow 51% foreign direct investment (FDI) in multi-brand retail and 100% in single brand retail on the Indian SME sector on different aspects of growth based on some select parameters. 

Major Findings of the Survey

The CII Survey is based on a large sample size covering different categories of SMEs according to sales turnover including companies with a turnover of Rs.25 lakhs to 1 crore, between Rs.1 crore to Rs.5 crore, Rs 5 crore to 25 crore and SMEs having turnover between Rs 25 crore and 100 crore and above, from different regions of the country.

The CII Survey reveals that almost 96% of the respondents from SME sector are aware of the Government’s earlier decision to allow 100% FDI in single brand retail and 51% FDI in multi-brand retail and also of the latest notification in January this year.

A majority of the SME companies surveyed, have supported the government’s decision and the notification allowing 100% FDI in single brand retail and 52 percent of respondents hope for an early implementation of 51% FDI in multi-brand retail with required notification.

On the question of how the SME industry considers entry of MNC retailers as a threat or opportunity, majority of respondents (66.7%) see it as an opportunity for their sector while around 21% of respondents perceive it as a threat. About 12.5 percent of respondents are of the opinion that the decision would have little or no impact on their business.

Majority of the respondents (98.6 percent) are of the opinion that t...

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