NEW DELHI: Government's plans to open up the retail sector for foreign firms remained in cold storage this year, while domestic companies strengthened their foothold in the sensitive industry despite agitation by smaller traders.Although political opposition stopped the government from allowing greater foreign investment, yet the world's biggest and second-biggest retailers Wal-Mart Stores Inc of the US and French firm Carrefour found a way out to establish their presence in the 330-billion-dollar lucrative industry.

The action-packed year, however, began on a wrong note for global players wanting to enter India with UPA Chairperson Sonia Gandhi expressing concerns over the government's foreign direct investment policy in retail. In a letter to Prime Minister Manmohan Singh, she asked the government to address issues raised from many quarters on the impact of these supermarket chains on the livelihood of small stores.

While this was music to the ears of opponents of FDI in retail, especially the Left parties, the commerce ministry pressed ahead with plans to increase FDI limit to 51 per cent in specific categories like electronic goods and sports items although the Cabinet note in this regard is yet to be cleared.

The government is expected to examine FDI in multi-brand products only after it receives reports from Indian Council for Research on International Relations and the National Council for Applied Economic Research. Currently, 51 per cent FDI is allowed in only single brand retailing.

"The year has been a mixed one for the retail industry there were not much progress on further relaxation on FDI policy and the 'big vs small' debate has taken a larger political shape," Asitava Sen, KSA Technopak's vice-president of retail and consumer goods, said. MORE PTIPioneer of organised retail in India, Kishore Biyani's Future Group carried on with its expansion plans aiming revenue of Rs 30,000 crore by 2010. The Group announced a new format, KB Fair Price Shops, on the lines of local kirana stores, a clever move to prevent any protests.

The sector also attracted other homegrown corporates. These included tractor-to-software group Mahindra & Mahindra, realty firm Parsvanath, two-wheeler maker Hero Group. Aditya Birla group acquired Andhra Pradesh-based Trinethra Super Retail Ltd, while rumors were also afloat about Subhiksha promoters selling a stake in the southern India-based firm.FMCG major Dabur also set up a subsidiary to run its branded stores with an initial investment of Rs 140 crore for opening retail stores to sell health and beauty products.

RPG Group-owned Spencer's embarked on a new branding strategy and trim the number of its current retail formats, with plans to invest up to Rs 2,500 crore till March 2009.Besides, private equity investments and public issues gained momentum and M&A activities picked up during the year.

Indiabulls Wholesale Services, the retail arm of Indiabulls Real Estate acquired 63.92 per cent stake in Piramyd Retail at an enterprise value of around Rs 208 crore. On the other hand, some retailers like Koutons and Vishal Retail came out with initial public offers to fund their expansion activities."PE and IPOs will fund growths in the sector.

On the back of the huge growth in organized retail, investments in the sector are likely to increase from USD 3 billion in 2006 to over USD 25 billion by 2010," Ranjan Biswas, E&Y partner and national leader for retail and consumer practice, said. -