New Delhi: The government has called 4,000 army shops in the country to stop buying imported goods, according to a document examined by news agency Reuters, aN action that could send an unpleasant signal to foreign liquor companies such as Diageo and Pernod Ricard.
Army canteens sell liquor, electronics, and other goods at discounted prices to soldiers, ex-servicemen, and their families. With annual sales of over $2 billion, they make up one of the largest retail chains in India. The order from the defense ministry said that in the future, “procurement of directly imported items shall not be undertaken”.
The declaration said the issue had been conferred with the army, air force, and navy in May and July, and was aimed at supporting Prime Minister Narendra Modi’s campaign to promote domestic goods. A defense ministry spokesman declined to comment. The order did not specify which products would be targeted. However, industry sources said they believed imported liquor could be on the list.
Chinese products such as diapers, vacuum cleaners, handbags, and laptops, account for the bulk of it. The media reported in June that Pernod and Diageo had briefly stopped receiving orders for their imported brands from such government stores. Diageo did not reply to a request for comment, while a Pernod spokesman refused to comment.
While imported liquor sales at defense stores generate only about $17 million in annual sales, the order would send a negative signal, said an executive whose company sells products at defense stores.” The liquor sales are small – but why would a government which is wanting to attract foreign investments do this? It’s a confusing, conflicting signal,” said the executive. The government has in recent months taken steps to stop Chinese businesses and investments following a border clash in June that killed 20 Indian soldiers.
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