India is open for 24X7 shopping

Shopping glory.
Shopping glory.
Image: Reuters/Sima Dubey
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Indian shopaholics rejoice.

The country has just tweaked regulations that’ll soon let consumers shop, watch movies, and eat out all night.

On Wednesday (June 29), the Narendra Modi government cleared the Model Shops and Establishment Bill, 2016, which will allow shops, banks, cinema halls, malls, restaurants, and other retail commercial establishments to stay open 24 hours, seven days a week—if they choose to.

The law will “facilitate ease of doing business and generate employment opportunities,” the government said in a press release on Wednesday. It also seeks provisions for the safety and convenience of women workers doing night shifts.

Currently, retail operating hours are governed by local laws, and the police often restrict movement of people at night, citing law and order concerns. In Delhi, for instance, bars and restaurants are not allowed to stay open beyond 1 am. In Bengaluru, restaurants must shut shop by 11 pm on weekdays.

To be sure, the new bill—applicable to establishments employing 10 or more persons—is only an advisory. It is left to the state governments to adopt it.

Modi’s retail plans

The move is in line with prime minister Modi’s attempts to generate employment and help small traders do more business.

“If the malls don’t have restrictions then why should the small shopkeepers have restrictions? So, now if a shopkeeper operates his shop till late and on all seven days, if he earlier employed one person, now he will have to employ two people. So won’t employment increase?” Modi said in a television interview on June 27.

At the same time, the new regulations will give offline retailers more flexibility to compete with online players such as Flipkart and Amazon.

“Once they (the states) have implemented it, offline retailers operating in those states will stand to benefit hugely as the Act brings them on a level playing field with online retailers (who operate round the clock),” said Anuj Puri, country head at real-estate consulting firm Jones Lang LasalleIndiaa.

On their part, Indian states, too, have been trying to be retail-friendly to provide a boost to the $600-billion sector.

Andhra Pradesh and Maharashtra have already adopted new retail policies. Andhra’s new rule, unveiled in January, allows stores and warehouses to stay open up to any time they want. Maharashtra, on the other hand, is offering tax benefits for the development of retail clusters.

On Wednesday, Indian retailers were in for another bonanza. The Modi administration also cleared the 7th Pay Commission’s recommendations, which will lead to 10 million government employees receiving pay hikes of around Rs1.02 lakh crore ($15 billion). As a result, shares of nine retail, food, and multiplex chains, including Jubilant Foodworks, PVR Cinemas, and retailer Future Enterprises, rose between 1.24% and 9.83% on Wednesday, the Business Standard newspaper reported.