The Gujarat chief minister’s comment is the first clear statement in favour of big retail and e-commerce from the party that has publicly opposed foreign direct investment, especially in multi-brand retail.
“There is no need to fear global challenges, try to convert the situation into an opportunity. Make the most of this situation. We are a powerful nation and have taken a lead in information technology. This is the age of online marketing, accept modern science and make use of it,” Modi said.
Modi surprised small traders with his inaugural speech at the Traders National Convention as they have expressed fears of being swamped by organised retail and had expected Modi to highlight those concerns.
While Modi made no direct mention of FDI in any of his three speeches in Delhi Thursday, he said his party supports the roll-out of a national Goods and Services tax, a major demand from industry for the next Central government.
Instead, he said small traders must learn to build brands and go online, creating virtual malls to take on large and multinational retailers. “Customers from even small towns are now going for branded stuff. They are going to malls to buy them. Small traders can build a virtual mall by getting into agreements with brands. You can have a virtual mall in small shops at the click of a button,” he said.
Just weeks ago, Rajasthan’s BJP government became the second state after Delhi to roll back the permission given to foreign direct investment of up to 50 per cent in multi-brand retail. Other BJP ruled states have not permitted such FDI and analysts said Modi’s views could force a rethink.
Global retailers such as Walmart, Tesco and Carrefour who had shown interest in India have since gone slow on their plans while even single-brand retailers such as Ikea have decided to pause despite getting all clearances.
Modi’s statements were lapped by big retailers.
“This looks like a strategic direction which is being set ahead of the elections and it’s a very welcome one. These comments and clarity will help everyone in the industry and foreign players to take decisions,” Kishore Biyani, CEO of Future Group, told The Indian Express.
Modi used the three different platforms to give some indicators of the economic policies the BJP could follow if elected to power.
“In the last 10 years we have lost out…We talk about fiscal deficit but we have governance deficit, deficit of vibrancy in democratic institutions, ease of doing business deficit, security deficit,” he said at the India Economic Convention.
“We need to restore the faith of common people. We don’t have direction, dedication and determination. Bad governance is like diabetes. More than policies we need governance…What we need is a complete overhaul of the departmental system. Laws should be made simple,” he said.
Economic decisions, Modi said, should not be taken under the influence of politics. “If the purpose for which the government has been constituted isn’t served, there is no point in running the government,” he said.
Modi said GST introduction was delayed as the Centre had not been able to prepare for it and had not listened sympathetically to the states.
“I have met the finance minister and told him if the IT backbone is not created GST cannot come through,” Modi said, without specifying why Gujarat has been opposing the Bill despite the Centre’s compensation offer.