Allaying fears of a possible FDI impact on small traders, Chairman of PM’s Economic Advisory Council C Rangarajan has opined that the impact of the move on small traders would be limited due to provisions that large retailers could open stores only in metropolitan towns.

"In my view, FDI in retail will have a limited impact on small traders as they have a locational advantage," Ragarajan said at an interactive session on 'Indian Economy - Vision 2020', organised by MCC Chamber of Commerce & Industry in Kolkata.

"I think small retailers have not disappeared in the US too," Rangarajan said in his reply to a query.

About the fear of Chinese goods flooding the Indian market through foreign retailers, he said it was unfounded.

"Chinese goods are coming to India through trade even now," he added.

On fiscal deficit, Rangarajan said he was hopeful of containing it at the level of 5.3 per cent of the gross domestic product (GDP) for the current financial year.

The former governor of the Reserve Bank of India, however, said that complete subsidy to food was of paramount importance for the country.

"The target of the government, as a part of its fiscal consolidation exercise, is to bring down subsidies as a percentage of GDP. But providing complete food subsidy is of paramount importance for countries like India," he said.