No need for change in riders; see FDI deals soon: Pantaloon

It tweaked sourcing norms for FDI above 50% in single brand retail, requiring foreign firms, which want a relaxation of the 30% procurement norms, to set up manufacturing facilities in the country.

Rakesh Biyani, joint managing director of Pantaloon Retail doesn’t see a need for changing the riders associated with FDI. "These riders have been designed to ensure the fact that investment happens in a larger scale. The need is to reduce the supply chain cost, reduce the wastages in the supply chain and improve the quality," he said in an interview to CNBC-TV18.

Meanwhile, he is hopeful that in the span of another six-12 months, we could see the government approving FDI deals.

The stock of the retail giant today touched an intraday high of Rs 209. At 09:22 hrs the share was quoting at Rs 189.30, up Rs 31.70, or 20.11%.

Below is the edited transcript of Biyani’s interview with CNBC-TV18.

Q: Are there any nuances in the conditionality that you have heard so far in the announcement that you have liked to be tweaked?

A: Not really, we have studied these riders in the past and they have been designed to ensure the fact that investment happens in a larger scale. The investment happens in the back end, plus the limit of USD 100 billion and 50% to go in the back end.

The need is to reduce the supply chain cost, reduce the wastages in the supply chain and improve the quality. That requires investment in the back end and in the supply chain. It is fair; it would have been good if more states could come on board, but my gut feel is as things will improve, some states will implement it, other states will follow soon thereafter.

Q: What did you make of the specific change in the sourcing norm for SMEs? Did that allay your concerns or does that continue to be contentious issue?

A: No I don’t think so because for the mix of products that we sell, it’s definitely possible to achieve these norms. It’s only going to help these small and medium enterprises (SMEs). Even today such sourcing is happening. With a focused approach I am sure that small and medium enterprises will flourish.

Q: What is your assessment of how many states FDI multi-brand can get rolling with, politically we have got some idea but what is your sense of what can be implemented on the ground?

A: I think the million people population restriction could be waived out by the states. Also it covers distances beyond 10 km also. So maybe about 16, maybe 30, it’s a beginning and that is what is important. We are making a beginning; we are going to make a beginning in terms of ensuring the fact that we can have investment in supply chain and add more value added products coming through.