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The country is likely to attract foreign direct investment (FDI) to the tune of USD 2.5-3 billion in the next five years if the decision to allow 51 percent foreign stake in multi-brand retail is implemented, a top official of rating agency CRISIL said here today.
"As per our estimation, the investment will be in the range of USD 2.5-3 billion in the next five years," Chief Economist of CRISIL, D K Joshi said at a seminar on the FDI in multi-brand retail.
But the entry of foreign players would not increase the market share of organised retail drastically, he added.
"Presently, organised retail consists of around 7 per cent of the total retail. It will possibly increase to around 10 per cent by 2016-17, which is still a very small share of the total market."
He, however, said there will be increase in efficiency in the overall sector.
The issues concerning supply chain management will not be completely addressed through allowing FDI, he said.
Ajit Joshi, Chief Executive Officer and Managing Director of Infiniti Retail (which runs retail chain Croma), said the government should clarify certain rules for facilitating investment. "There is need of clarity on certain rules and also flexibility in labour laws," Joshi said.