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Monday, 19. December 2011 - 10:35 Uhr

FDI in Multi-Brand Retail Market in India

FDI in multi-brand retail market was a hot topic for discussion recently. Due to lot of hue and cry from various political parties and NGOs, government has selved the proposal for time being. Though FDI is good for economy in general as it brings investment, advanced technology and manegrial skills, in addition to creating employment to the host country, but , the same can not be true in all the cases, and may bring many disadvantages in many cases as in case of retail market. In retail market, the need in India is to create better storage and transportation facilities especially for grocery and other food , vegetables and dairy products, so that demand and supply could be matched efficiently for benifits of both producers and consumers, as on one hand producer is not getting sufficient price for his produce due to lack of accessibility to larger consumer bases in time and on other hand consumers are paying through their nose due to poor availability of goods due to lack of efficient storage, transportation and distribution infrastructures. To achieve the same India need not depend on foreign investors as domestic investors are capable of addressing  these challenges and they need to be incentivised through various policy measures to invest in the same.

The major concern and apprehension that FDI in retail maket will put street vendors, hawker and petty shop owners out of job is not correct as it may provide a different kind of employment requiring more skills, and petty shop owners, hawkers and street vendors will still be there to serve the need of a targeted group of consumers and probably they may have to change the geographical location of their operation. However, if FDI is permitted, it will provide way to pump foreign goods in big way  in India that may be quite detrimental to Indian industries and agriculture, as in consumers market by and large India is self sufficient and its economy is working well even during global reccession mainly due to in-house production and consumption. The lesson needs to be learnt from FDI in soft drink by Coca Cola and Pepsi who eliminated indegenous soft drink industry. 


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