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'FDI in retail to weed out middlemen in textile industry'

Press Trust of India/New Delhi 17 Sep 12 | 07:30 PM

Welcoming the government's decision to implement 51% FDI in multi-brand retailing, Confederation of Indian Textile Industry (CITI) today said the move will encourage organised retailing by reducing the role of middlemen and improving the supply-chain.

"The decision would encourage organised retailing, which in turn would result in more centralised procurement operations, improved supply chain management and reduced involvement of middlemen between producers and retailers," CITI Chairman S V Arumugam said.

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While producers including farmers would get higher remuneration, consumers would get the finished products at more competitive prices with the elimination of exploitation by middlemen, he added.

On September 14, the Cabinet decided to operationalise 51% FDI in multi-brand retail but left it to the state governments to allow setting up of such stores.

In November 2011, the Cabinet had approved 51% FDI in multi-brand retailing, but had to put it on hold due to opposition from political parties, including UPA ally Trinamool Congress.

Further, Arumugam said that all over the world, textiles business depended heavily on organised retailing for efficient distribution systems, supply of garment and home textiles to consumers at low-cost.

In India, fabrics are also a major retail item. "Economies of scale in both procurement and distribution would reduce cost for businesses and prices for consumers, especially for textiles products which are basic needs of the masses," he said.

This would also push up consumption to the benefit of the economy as a whole, he added.

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