People shop at a Bharti-Walmart store on the outskirts of Chandigarh on Wednesday. (AP)

New Delhi, Dec. 5: Foreign supermarket giants such as France’s Auchan, Japan’s Lawson and the UK’s Sainsbury’s will wait for the fine print before investing in India’s multi-brand retail, despite a vote in favour of FDI in retail in the Lok Sabha today.

Global retail chains such as Carrefour, Metro, Tesco and Walmart, who are present in the country through wholesale shops or back-end tie-ups, are also awaiting clarity on local sourcing norms before finalising front-end retail formats.

“It is likely to take 12-14 months for multi-brand international retailers to actually open shop in India since post business decision, the government’s prior approval will be required for each case, followed by land acquisition, supply chain development,” said Paresh Parekh, tax partner (retail and consumer products), Ernst & Young.

According to a senior executive from a major retailer, it is simpler for Walmart and Tesco — present in India through local partners — to enter direct retailing. Others are likely to find it difficult to engage an Indian partner with a financial back-up to manage the 49 per cent stake, comply with the sourcing norms and navigate the regulatory environment.

“There are still so many questions. The conditions have to be studied, we have to understand the state-wise conditions. There’s still a long way to go,” the executive added.

UK-based Tesco said it was planning to open stores in the country but would have to study the “unusual” sourcing conditions before taking a decision.

“We are very interested in India... (but) I think we haven’t taken any decisions yet,” said Dame Lucy Neville-Rolfe, executive director (corporate and legal affairs) and a board member at Tesco UK.

For local players such as Reliance, Tata’s Trent and Shoppers Stop, the FDI approval means renewed negotiations on strategic tie-ups with global retailers. Kishore Biyani’s Future Group, which has been in talks with France’s Carrefour and Lawson, can now finalise the contours of the deal, analysts said.

Welcoming the vote in favour of FDI in multi-brand retail in the Lok Sabha, Biyani termed the reform as a “game-changer”.

Industry lobby group Assocham president Rajkumar Dhoot said, “The economy in particular, and the nation as a whole, will derive a lot of benefit from this move.”

However, analysts warn that it will take around 1-3 years before the $500-billion retail sector sees significant foreign funds inflow.