With ONDC in place, separate national retail policy takes a backseat
'A policy is a set of actions, and those actions are already being taken. Timely interventions are happening on a regular basis, such as the setting up of the National Traders Welfare Board and the launch of the ONDC platform. There is no need for a separate policy for retail trade right now,' a source tracking the matter told The Indian Express.
The Ministry of Commerce and Industry told Parliament in 2023 that a draft National Retail Trade Policy had been prepared, based on consultations with state governments and major industry and trade associations. The draft focused on preparing strategies for the overall development of retail trade through targeted efforts to promote ease of doing business in the retail sector.
The policy was expected to introduce several measures to reduce the compliance burden, enhance ease of access to credit, and decriminalise minor offences for all formats of retail trade. 'Special emphasis is placed on assessing the requirement of licences, removing renewal requirements, inspection reforms, facilitating public service delivery, and the creation of a single-window facilitation mechanism,' a parliamentary response said.
India's retail sector contributes nearly 12 per cent to the gross value added (GVA) to overall GDP, making retail the country's third-largest sector. Experts have said that India currently lacks a single cohesive policy governing all retail formats, which creates 'pockets of imbalance between retail formats' and hampers the sector's growth.
While some states like Maharashtra, Andhra Pradesh, and Karnataka have introduced their own policies, a comprehensive national approach is missing, leaving other states governed by 'outdated and unclear regulations'. An overarching policy is considered one of the most 'significant and urgent challenges', according to a CII report in 2018, prior to the development of the draft retail policy in 2021.
'A national policy can encourage the modernisation of in-store operations and standardise back-end infrastructure development by providing financial assistance, subsidies, and tax breaks, and improving access to capital. This modernisation process is expected to lead to more cost-efficient supply chains, improved labour productivity, and savings for end customers,' the report said.
Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
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Kuljeet Singh, chief financial officer at GI Group Holding, a staffing solution provider in the retail sector, said delaying the National Retail Trade Policy may slow the momentum of employment growth in the retail sector. 'The policy was expected to support small traders, shopkeepers, improve access to credits, and encourage formal job expansion. Without it, growth in some areas like logistics, warehousing, etc., may take a bit longer," Singh said. 'However, in our view, retail will continue to provide jobs as it does today. This delay may be a missed opportunity but with the right steps taken later, the sector can still grow stronger."
