Will retail trade policy promote ease of doing business?

 – Gudstory

Will retail trade policy promote ease of doing business? – Gudstory

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Why do we need a pan India retail policy?

India’s offline retail market was estimated to be worth $860 billion in 2022; It is expected to almost double by the end of the current decade. On the other hand, according to a 2023 report by consulting firm Deloitte, online retail is a $70 billion market and is expected to grow at a rapid pace. However, the sector lacks a cohesive policy that regulates retail trade across India. While the country has clear rules and regulations that govern foreign investment in single and multi-brand retail trading, there is a need for a model policy that can be adopted by states to derive greater benefits for small and medium traders.

What are the compliance issues?

Retail trade in India is governed by several laws, including the Shops and Establishments Act, Competition Act, Consumer Protection Act, Essential Commodities Act and Legal Metrology Act. According to a 2020 CII report, in many cases, retailers need to obtain 16 to 25 licenses to open a store. Additionally, retailers require permits and licenses from central as well as state governments and local authorities before opening and operating stores. The large number of laws, along with state-level variations in implementation, create complexity for retailers.

What are retailers looking for?

Retail organizations have been demanding a comprehensive policy for many years. Broadly, they are seeking to streamline approval and compliance mechanisms for ease of doing business; improving access to capital; Rapid adoption of technology and modernization by traditional retailers; Bridging the gaps in logistics and supply chain infrastructure and enhancing labor participation and productivity.

Are there any best practices to follow?

The CII report highlighted retail policies in developed markets aimed at helping both large and unorganized retailers. For example, in 2016, Singapore launched a retail scheme to help small retailers digitalise their businesses and help SMEs acquire the necessary skills. Singapore has also launched the Hawkers Go Digital program to enable greater adoption of digital payments by hawkers and stall owners. Applying for a permit to operate a supermarket takes five working days in Singapore compared to 60–90 days in India.

What has the government done so far?

Earlier this year, the Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed. The Bill decriminalizes certain acts like the Legal Metrology Act and the Food Safety Act and rationalizes minor offenses to increase ease of doing business. The National Retail Trade Policy is in the draft stage. Once enacted, it will provide a framework for states to create a uniform environment for the retail ecosystem. A portal will be set up for retailers to apply for multiple licenses to open and operate stores.


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