Fdi in Retail Sector

Topics: Retailing, Investment, Foreign direct investment Pages: 10 (3270 words) Published: December 11, 2012
FDI in retail will benefit consumer, create opportunities: US Washington, Dec 8, 2012 (IANS)

The US government and corporate America alike have welcomed the Indian parliament's approval of foreign direct investment in multi-brand retail, saying it would spur investment in infrastructure and benefit the consumer.

"We believe direct foreign investment in retail will grow markets in India as it has in China, Brazil, and many other developing economies," State Department spokesman Mark Toner told reporters Friday.

"As Indian officials have pointed out, foreign direct investment can create opportunities for small businesses, for farmers, spur investment in infrastructure, and bring benefits to consumers," he said.

Asked how it would increase US-India trade, Toner said while he did not have the numbers "a number of US firms are obviously keen to invest in the retail sector of India, and obviously I think will only deepen our economic cooperation."

The US-India Business Council (USIBC), made up some 400 top US companies seeking better commercial ties with India, has also applauded the measure.

"The new law will usher in much needed investments and expertise into supply chain development that can more efficiently link farmers directly to markets, thus minimising loss due to inadequate storage and transportation facilities," it said.

"We thank the UPA government and supporting parties for working together to pass this important bill. It will modernise India's retail sector and rein in high levels of inflation" said Ron Somers, USIBC President.

"FDI in multi-brand retail will support the government's goal of achieving remunerative prices for farmers, and will also increase quality and choice for India's increasingly sophisticated consumer base."

Recognizing that it will be up to individual states to implement this big bang reform, USIBC is keen to work with progressive state governments including Uttar Pradesh, Gujarat, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Punjab, and Bihar, and in 2013, will lead many of its 350 member companies to visit these states, he said. The government’s decision to open up Foreign Direct Investment (FDI) in the retail sector has created an uproar of opposition in the political arena. However there seems to be a greater diversity of opinion among our readers at least. On Sunday 27 November, Firstpost published an article titled, Manmohan Singh’s big retail risk which has received a number of comments arguing both for and against FDI in the retail sector. We found these comments extremely interesting and thought provoking in terms of the points they raised, and have therefore decided to publish a cross section of them here.

The FDI issue has points both for and against it: Reuters
Some readers such as Arul Prakash feel that the measures will put farmers at a disadvantage and also result in a situation where consumers are not given the freshest produce. He writes, “Once they come the farmers who now have several middleman to sell their goods..will have only a few retail stores to sell in future. Usually that means price he gets will not be as competitive as it is today. Second! the same supermarkets may not actually give the best products grown in India to Indians..third! they can allter the food habits of the nation. Instead of eating fresh foods we will all be eating canned foods soon!” “Guest”, an anonymous commenter on the article also feels that FDI will be more bane than boon. He says, “Manmohan Singh and his team may believe that Walmart, Carrefour etc. are coming to India to uplift the condition of agricultural sector and will improve supply chain efficiency. We believe they are coming for sheer profit motives and if that means squeezing the billion+ Indians, selling Chinese goods, killing indigeneous ventures - they will do that. Today’s independent entreprenuer and businessmen will become their salaried employees.” On the other side of the debate, Shiva...
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