National Retail Trade Policy: How Centre seeks to change retail trading in the country

The Parliament was informed earlier this month that the Centre has proposed to have a national retail trade policy for creating a conducive environment to streamline the growth of all formats of such trade, and stakeholder consultations are being held for that. Minister of State for Commerce and Industry Som Parkash in a written reply to a query in the Rajya Sabha said a conducive environment can be created by simplifying rules and regulations. “The government proposes to have a national retail trade policy for creating a conducive environment for streamlining growth of all formats of retail trade,” he said.

A draft national retail trade policy has been prepared for streamlining retail trade and development of all formats of the retail trade sector in a harmonious manner, Minister of State for Commerce and Industry Som Parkash had said in a written reply in the Lok Sabha on Wednesday.

So what is the National Retail trade policy?

As the nation battles the coronavirus pandemic with the emergence of new COVID-19 variants like Omicron, the significance of retail supply chains becomes clear in ensuring essentials are available across the entire country.

Here are some of the objectives of the policy:

• To promote e-commerce all over the country.
• To leverage retail trade as a tool for the socio-economic development of the country.
• To encourage skill development and create more employment opportunities for all sections of society involved in retail trade.
• To identify and address existing infrastructure gaps affecting the retail trade industry.
• To accelerate investment flow to underdeveloped regions across the country.

Parkash said the policy was aimed at improving ease of doing business by ensuring easy and quick access to affordable credit, facilitating modernisation and digitisation of retail trade by promoting modern technology and superior infrastructural support, development of physical infrastructure across the distribution chain of retail trade, promotion of skill development and improving labour productivity. It would also seek to create large-scale employment opportunities, providing an effective consultative and grievance redressal mechanism for the retail sector, for the welfare of traders and their employees.

This Retail Trade Policy will also address the issue of physical infrastructure in setting up of data centres along with power supply, connectivity etc, and also aims to encourage foreign investment in the marketplace and e-commerce platform, in which foreign investment has been made.

Retailers in India have been batting for a national retail policy that will help form a framework and mobilize the sector, 80 to 85 percent of which is still largely unorganized, reports Mint. The sector provides employment to 50 million people. Retail trade in India is governed by many laws, including the Shops and Establishments Act, Competition Act, Consumer Protection Act, Essential Commodities Act and the Legal Metrology Act.

The high number of laws, compounded by state-level variations in implementation, create immense complexity for retailers, especially those with a pan-Indian footprint. For example, the Shops and Establishments Act allows retailers across all states to open their stores year-round, 24 hours a day.

How will it change the retail industry?

As The Hindu Businessline reported, a report by CII and Kearney sheds some light on how a comprehensive National Retail Policy could facilitate the creation of three million jobs by 2024. It states that investing ₹6,500 crores in retail-linked infrastructures, such as cold storage facilities and warehouses, could generate an additional two to three lakh jobs by 2024.

Moreover, the report highlighted that the proposed policy could generate indirect employment opportunities in allied sectors. Significantly, the retail industry is one of India’s largest employers of women, who comprise around 25-30 percent of the total workforce. Keeping this in mind, women-centric policy reforms could inflate this figure to around 35 percent or higher.

The report concluded that retail is a vital part of India’s growth story. A cohesive retail policy built on the pillars of simplification, standardization, and digitalization will pave the way for significant growth and accelerate a short-term economic recovery.

With inputs from agencies

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