FDI in retail India. What\'s your take?

[bigdreamer]

FDI (Foreign Direct Investment) economic reform introduced by MMS lead government is opposed by many political parties. While many seems to blame the timing of it - the opposition parties are stalling the parliament functioning. BJP is resorting to blackmail politics at the drop of their hat - it's sickening to say the least. There are major decisions to be made in the parliament winter sessions like discussing about black-money issue, jan lokpal, etc... but - it's all stalled.

Some of the pluses I see are:

Provide strong supply-chain and proven process by foreign companies: India currently lacks process and infrastructure needed to preserve food produce for longer time.

Policy mandates atleast 50% of investment to be spent on infrastructure development like cold storage, logistics and transportation.

The FDI reform is only applicable in urban centers with more than 1million population

The retails must source atleast 30% of the items from small industries

It also provides employment opportunities

Some of the big international retailers waiting on the wings to open their shop in India are:

Walmart

Tesco

Carrefour

Ikea

Target

H&M

Marks & Spencers

GAP

Best Buy

Please let us know your opinion - is it good or bad for India as a whole?

[Rajahindustani]

Opening of retail to FDI s good because of the following:

over 40% of the produce of grains and fruits etc is spoilt in India due to lack of proper storages and transportation to new markets/consumers. With the big retail giants like walmart they will bring in expertise in transportation and storage facilities and help the farmer.

Farmers are exploited in Mandis of India and middlemen pay them very little and prices of goods become very high by the time they reach consumers.

The supply and demand will likely balance and bottlenecks in distribution of foodgrains and produce are likely to diminish. This will ease inflation.

Local mom and pop stores will have pressures to be more professional.

A separate service type of jobs can be created for workers in places like Walmart etc.

Big giats have economies of scale which can lower costs of items.

Bulk items can be bought in big retail shops.

World class goods can be had in India as well.

The big retailers may create such a demand of local raw materials and produce that farmers may have to produce more and hence more profits.

Big retailers will need more big warehouses and shops and malls and hence real estate commercial sector will also get a boost.

I think with passage of time all the opposition will go away and all naysayers will fall in line.

[KirKS]

These are the key points I am seeing in news papers & debates. Some are scare mongering and some are real issues.

Why not FDI?

4 crore retail jobs at stake.

Cost will slowly adjust to international levels at later stages, hurting aam aadmi.

Small & medium industries could perish.

FDI cannot prevent the rotting of produce/grains in the warehouses.

Real estate will shoot & hurts aam aadmi.

Price control will become impossible.

Closure of unorganized small scale industries.

And here are some aspects as to why FDI in retail is required :

Elimination of dalaal menace, helping both producer & consumer.

40% rotting of fruits/veggies could come to a halt.

Funds will be available for critical cold storages.

Jobs will be created in marketing/bulk purchase/management.

The best in global technology is to come.

Due to real competition, prices & inflation may come down

Only 28 cities among 53, with a population of over 10 lakh will get FDI. Majority of India remains unaffected.

Consumers get quality choices.

Infrastructure will improve with foreign money.

Will spawn new small industries linked to retail industry

My personal preference is for FDI in Retail, in a gradual way. Since Indian retail industry is about $500 billion in size, a $5 billion expected over the next 5-7 years via FDI shouldn't make any major impact.

[mcr]

I think the current plan to open up FDI in cities with population more than 10 lakhs and with some conditions is a good idea. The opposition parties are opposing it purely for political reasons (seven years back BJP was pro FDI). Opposition from the left parties may be from a pure ideological perspective.
Cities like Bangalore already has several big retail stores just like the Walmart and Target. Spar hypermarket is one such example - I don't think Walmart will do anything different than Spar. I think that these big stores can co-exist with the small mom and pop groceries peacefully. In spite of stores like food world, reliance fresh, heritage fresh, smart, spar, More etc in every neighborhood, small grocery stores are thriving in Bangalore. Consider my own example - right next to my apartment complex there is a 'More' supermarket. But we still buy most of the groceries from a small store which is also nearby because we get the same items for same price and there is no check out queues etc and our shopping is very quick compared to a big supermarket. Of course we do shop in those super markets also some times. The point I am trying to make is that there is a market for both entities. Besides, unlike in the west not everyone can drive to their nearest big box retail store and do their shopping, people still prefer to walk to their friendly neighborhood store and buy stuff while having a friendly conversation with the shop keeper.

The most important benefit of opening FDI is the improved supply chain management which could eliminate many layers of middlemen thus giving a better price to the farmers for their produce. At least for this one reason we should allow FDI.

[KirKS]

The opposition parties are opposing it purely for political reasons (seven years back BJP was pro FDI). Opposition from the left parties may be from a pure ideological perspective.

Yes, I heard BJP is talking of no opposition to single brand retail, but opposing multi brand. I already wrote to Sushma Swaraj telling her that this opposition is silly.

The more funny thing is that the same Manmohan Singh, as leader of opposition in Rajya Sabha in 2003, had opposed FDI in Retail, stating that it was bad for India :) If I recall right, NDA government of Vajpayee had talked of only 26% FDI, not 51%. Even that was found 'bad' by Congress party then.

[Rajahindustani]

Another benefit is that it can give employment in retirement to people like me who do not have any pension. A part time job in Walmart after 65/70 is not a bad deal. You get to see people and pass time and have fixed working hours. On top of that you could avail fee airconditioning in India's heat in summer.

[LotsOfRokda]

I am for FDI. The retail system has been exploited enough ..it is time that the middlemen get their act together. I hope this works wonders for the infrastructure.
I personally dont think mom-and-pop stores will be affected as they were in the US. The reason being the population is too much and too diverse to all land up at Walmart. I can't imagine going to Walmart on a Sunday morning at 9.00 am for buying bread and milk when the store downstairs is going to drop it home at 8.00 am.

[dbs]

Another benefit is that it can give employment in retirement to people like me who do not have any pension. A part time job in Walmart after 65/70 is not a bad deal. You get to see people and pass time and have fixed working hours. On top of that you could avail fee airconditioning in India's heat in summer.

I doubt that. There are plenty of youngsters around looking for jobs. They will be preferred.

[QuoVadis]

The retails must source atleast 30% of the items from small industries

There still seems to be some confusion around this. Whether the small industries could be anywhere or only in India. This news article seems to have clarified that the 30% sourcing of items should be from Small Industries located in India and the wording "from anywhere in the world" was dropped.

However this one still opens it up for doubt .

In my small world view, besides the benefit to the producer/farmer, I am for more efficient players in the market if it results in forcing my neighborhood Reliance store (or Food Bazaar) to up its game and provide better service/products. It is of very very poor quality the way it is right now with an abundance of apathy towards the customer.

[Chakraan]

Indian shoplifters welcome decision to allow FDI in retail.


Indian shoplifters have wholeheartedly welcomed the government decision to allow FDI in retail sector and are looking to steal as many costly products as possible when international retail chains such as Walmart open their stores in India. The shoplifters are confident that they can work around the anti-theft devices and system of these stores and use their own desi jugaad to run away with stolen goods.




http://www.fakingnews.com/2011/11/indian-shoplifters-welcome-decision-to-allow-fdi-in-retail