Ambani: Ready to compete

London, Oct. 8 (PTI): Reliance Industries chairman Mukesh Ambani is in favour of the government allowing retail giants such as Tesco, Wal-Mart and Carrefour into the Indian market, saying they would contribute to the economy immensely and keep local companies on their toes.

“Companies like Tesco and Wal-Mart would contribute to this economy hugely and keep local companies on their toes. We should welcome Tesco because it’s good for competition, and that’s good for Reliance,” Ambani told the Sunday Times today.

At the moment, Ambani has a clear run while the government keeps global retail giants waiting to enter the country. “Every company has a home market and a foreign market. We’re in India, so we don’t need any (help from) regulation to get a headstart. Tesco would add value to India. Foreign direct investment should be opened up,” he said.

Reliance is slated to open its first retail store in Hyderabad in the next few days.

Ambani plans to establish a $5-billion pan-India chain of supermarkets with 784 branches in the smaller cities before opening stores in the metros.

He also wants to build a demonstration model of what the country could be like and start a revolution in the relationship between its cities and the countryside.

Ambani said the country’s finest fruit and food produce would be supplied to his Reliance supermarkets from 1,600 new farm centres. This, he believes, will wean farmers away from their overloaded bullock carts and draw them into a new and better-paid relationship with 21st century technology.

Ambani believes his retail venture can generate $25 billion in annual sales and 1 million new jobs by 2011 by training farmers to use new machinery and information technology.

Noting that the food industry is not organised, Ambani said, “There’s a limited shelf life. The losses from moving between farm and store are between 30 and 50 per cent and if farmers can’t sell, they lose everything. The challenge is to cut that out.”

Part of his strategy will involve bypassing ground transport altogether — he has bought a fleet of aircraft to fly fresh fruit and produce to supermarkets from remote farms where poor roads would mean they perish before reaching the market.

The supermarket and farming ventures will be based on the business model Ambani pioneered at Reliance Infocomm, the telecom company he launched in 2002. Within three years, it had laid 80,000 km of fibre-optic cable and captured 25 million customers. However, he lost the company to his brother Anil following their split.