Saturday, September 29, 2012

FDI in Retail in India

After waiting for reasonable time and going through internal thought process and analysis, I decided to publish my point of views on some key issues, which are holding my attention and some part of my thought process. I am using most accessible media i.e. internet and instrument as blogs for this matter.
I strongly believe that, all time we are dealing with ‘Relative Truth’, so these are my point of views on some matter and still there is scope for addition, correction and improvement, for which I would like to encourage readers to provide their valuable inputs as comments.

This particular blog is on recent development in Indian economy i.e. ‘ FDI In Retail’. I believe it is kind of a bold step taken by government and particular prime minister Dr M M Singh, I respect him and his capabilities as a good economist. Find some Pros and Cons on matter of FDI in retail in India as below, which I have gathered from news media and add my thoughts.

-          As new global retailers will invest in infrastructure to build warehouses and logistics, it will reduce wastage

-          Organized farmer and manufacturers can feel more secured, as they will enter into contract with global payers for their production, also will enjoy higher reach for their production

-          New and better technology will be introduces by global retailers in the sector, it will help to be more productive and to improve quality

-          Consumers will/can have better value for their money as mediators will be reduced and access of global products

-           Large chunk of educated youth will have better opportunity for job

-          Major beneficiaries are educated youth, organized farmers and manufacturers, consumers, production oriented countries like China, infrastructure and logistic companies and definitely global retailers


-          Small/marginal farmers and manufacturers will have hard time to compete with global and   local  big players, law of survival of the fittest will prevail

-          Many mediators and mom – pop store owners will be at loss, even some need to change their profession

-          Manufacturing oriented countries like China will have access of large market of India

-          New entrepreneurs will have hard time to establish them selves

-          Global players’ dominance will increase in Indian economy

-          More trend for urbanization will be observed, rural market will suffer, as people living near big cities will try to get products from big outlets on weekly or monthly basis

-          Major loss will be for small farmers and manufacturers, rural market players, mediators, mom-pop stores

In above context, I also would like to add more thought on existing situation of Indian economy and market

-          Gap between wealthy and poor are increasing

-          Despite Govt. efforts to reduce migration from villages, urbanization trend is being experienced in all over India

-          Many of our traditional players like cobbler, carpenter, tailors, mom – pop store owners are loosing or already lost shine

-          Infrastructure needs to be improved for wastage reduction, better productivity, increase quality and reduce prices

-          Retail process needs to be more transparent to save consumers from wrong practices by mediators

Looking at these situations, I believe FDI in retail is like ‘riding on a tiger’ which needs very well planning and strategies, I hope we will able to deliver both.


drupad h. solanki