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Foreign direct investment (FDI) in retail sector.

Background


The recent cabinet decision on FDI in retail has triggered protests by opposition and key allies of the ruling United Progressive Alliance (UPA), who are demanding a roll back of the policy. The hour-long meeting held in Parliament House failed to resolve the logjam in the two Houses as opposition parties, led by BJP and the Left, stuck to their stand and demanded rollback of the Cabinet decision to allow 51 per cent FDI in multi-brand retail. Though at present only 53 cities with population not less than 10 lakh in the country have been identified for FDI As the fourth-largest economy in the world in PPP terms, India is a preferred destination for FDI. During 2000-10, the country attracted $178 billion as FDI.


Favor


  • This will bring modern technology to the country.
  • Improve rural infrastructure. It would help build infrastructure and create a competitive market.
  • Reduce wastage of agricultural produce.
  • Enable our farmers to get better prices for their crops.
  • Consumers will get commodities of daily use at reduced prices.
  • Biggest beneficiary of this would be small farmers, who would be able to improve productivity and realize higher remuneration by selling directly to large organized players and shorten the chain from farm to consumers.
  • Government too stands to gain by this move through more transparent and accountable monitoring of goods and supply chain management systems. It can expect to receive an additional US$ 25-30 billion by way of taxes
  • Opening of retail can be seen as a solution for food inflation, which has been confounding policy-makers. FDI in retail would help in building much needed back end infrastructure. Additionally, he said, investments in cold storage chain infrastructure would reduce loss of agricultural produce and provide more options to farmers.



Against


  • Our interest rates today are as high as 14 per cent to 16 per cent how do we compete with the economies which have a 4 per cent interest rate. Our infrastructure our trade facilitations our labor laws, all these factors collectively don't make India low cost. So do you want India to become a center where we allow foreign companies to come in and set up these large chains which eventually instead of selling domestic products out sourcing internationally the cheapest sources and selling those products. Please remember domestic retail normally sources domestically, international retail sources internationally because they source from the cheapest sources.
  • Even if big retail companies help the farmers in resurrecting their economy, what plan does the government has for millions of middlemen who are part of the business process chain that ensures manufactured products reach end users.
  • We engage millions of uneducated and semi-educated people at various stages of retail business spread across towns and cities but we are afraid that Tesco and Wal-Mart will only engage smart and educated workforce in small strength, comparatively.
    Conclusion
  • Government is taking this decision in good faith. Few persons and lobbies controlling the rates of food commodities in India. And bringing more competition in market will bring better prices for buyers as well as sellers of commodities. Parties protesting against FDIs in retail have choice to not allow FDIs in the states they are ruling. Government should make a regulatory body for the commodity trade as we have for cellular services.

Contributed by: Studyfreak

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Points added by members


Added by: Rahul Kumar



Point:

FDI in retail sector is ggod for India with mandatory regulatory body to assess any negative impact. As Indian agriculture sector is key sector, but reality in present scenario is that middle man supplying the agricultural products reaps the profit due to lack of proper supply chain from farmer to the market. Due o presence of major players these could be reduced.





Date: 2016-11-02 01:35:09

Added by: Rajeev kumar yadav



Point:

I think FDI is not good thing for India. Becouse we are totily depanded on agriculture, due to agriculture India earn name and fame in the world. so we should give the valu of agriculter.

when FDI will come in India that time there is no granty that we will fill comfartable. and youth of our country will get job.




Date: 2015-11-03 01:57:18

Added by: Karan Gandhi



Point: In the long run, FDI may be harmful as it will give the reigns of the economy to other nations. Moreover, we will profit for some time and then later others will take away our money via profits and *ta da* rupee falls down down down



Date: 2015-08-17 22:44:56

Added by: raghav pratap singh



Point: hello everyone,,FDI is acceptable when these foreign countries are give employement to the indians as per the qualification of the person,every coin have there two faces so the FDI also have positive and negative aspects too, but i must say that we r lived in developing country we accept all the useful changes and neglect the negative aspects .



Date: 2015-08-05 14:19:19

Added by: AParna



Point: Main disadvantage is small scale industries are comit with large scale industries that time domastic industries may suffer.by using ths investment india getting good technology



Date: 2015-04-12 04:45:14

Added by: ratnesh chaturvedi



Point: fdi is really good for developing country like india but govt should make some strict rule for fdi as per census our most of population are living in poverty.there this no job, no food. it should prommise that fdi will provide the job,food,better life standard for everyone..



Date: 2014-11-24 16:29:59

Added by: kumar lav



Point: we all know that India is a developing country.and to develop India will have to excel in every field .. be it the competition from foreign markets...Indians are second to none .even after so many foreign companies have started their business in India, Indians have not looked back.. but always stepped further. THANKS



Date: 2014-10-29 09:28:45

Added by: rheeee



Point: I think fdi will affact the middle class people.there will be unemployment.some people will get job of sells man and sells women in wall mart. in starting mnc will buy raw material from farmer at high rate but after getting stability it will start to force farmer to sell raw material. indians will become slave again.



Date: 2014-10-04 04:54:50

Added by: priyadarshi raj



Point: Well everything in this World have some pros and cons and this is exactly with the FDI . One side we talk of democracy and on the other way we are against the FDI .FDI is going to bring technology in our country it can improve the condition of farmers can bring the inflation rate down



Date: 2014-09-25 21:29:37

Added by: Narendra Kumar Sharma



Point: supoose in any town there are 100 shops and in these shops on an average four person from the family of owner of shop is directly or indirectly employed through that shop.so total become 400 employed people without requiring any specific skill.on other hand on wallmart in town will employ maximum 40 person and only qualified persons.so you can see employment status.and at starting they might give lucrative rate to farmers but later on will they compromise with quality?.no, and every farmer will be forced to sell to retailers at a price fixed by retailers acvording to quality. only top quality will be supported and other will suffer very badly.



Date: 2014-08-23 02:37:12