German wholesaler, Metro AG, on Friday said government's new ecommerce rules are boon for kirana stores.

Last year, the government put in place new norms, which would end discounts and cashback offers that online platforms with foreign investment were offering. The new rules are set to come into effect from February 2019.

In an interview to CNBC-TV18's Rituparna Bhuyan, Olaf Koch, chief executive officer, feels that there is a need for kirana stores to adopt a more modern approach in their operations.

Talking on Metro Cash and Carry's expansion strategy in India, Koch said the German wholesaler would be more selective in their store expansion plans.

Koch said, "Our business in India is really focused on wholesale and we are supporting the small business owners, like kiranas and small time restaurants. It's true that kiranas are the largest audience which we are serving. We are trying to make kiranas more competitive and modernise them by giving access to digital tools. The most recent regulation in India is just making sure that there is a fair balance of power and there is a level playing field for everybody."

"The neighbourhood stores play a special role. They are not only trading products, they are neighbourhood services and they have a social cause. However, they also need to have a longer tail of products, modern way of displaying products and need to have the digital component that people can order and deliver," he added.