• The article published in ‘The Day’ throws light on the
introduction of FDI in retail sector and its after effects on
general people as well as our economy.
• The controversial move taken by the Government had
resulted in a day long strike by millions of protestors
which were mostly traders, local businessman and
• For the first time, foreign firms will be allowed to take a 51
percent stake in retail stores, allowing supermarket giants
like ‘Tesco, Wal-Mart and Carrefour’ to swoop in. That
has enraged the owners of millions of small shops known
as kiranas, who fear they will be trampled by the
EFFECTS OF FDI ON
• Wastage and storage problem will be resolved
• Efficient logistics, production and distribution
• Distribution and warehousing technologies
• Foreign retail companies have immense supply
chain expertise and guaranteed efficiency.
• It is estimated that 50% of the investment and jobs
should go to rural areas, 30% of the inputs should be
sourced from medium-sized and small enterprises.
• It will create at least 10 million jobs in industries such
as agro-processing and logistics.
• Improvement in the quality of employment.
• India has been facing food price inflation (it was
12% a couple of months ago). The efficiencies of
superior supply chains will reduce wastage and
• The minimum sourcing requirements will help small
industries and boost their income.
• Entry of foreign players will bring huge amount of
capital in country and profits earned by these
companies will give our government a handsome
amount of money in form of tax.
• FDI in organized retail could help tackle inflation,
particularly with wholesale prices. Growth of
• The presence of global retailers in Indian retail
industry will further enhance exports from India as
they would also source Indian goods for their
international outlets in a big way leading to a
remarkable increase in Indian exports.
• Safety & quality standard will be quite high which
will improve overall shopping experience of
• Up gradation of lifestyle & fashion of people, and
they will get easy access to international brands.
• FDI in retail will help farmers secure remunerative
prices by eliminating middlemen.
• Retailers respect the cultural, ethnic sentiments of
their customers and accordingly arrange their
products in their stores, which will be totally absent
in big retailers.
• It is argued that one large store like Wal-Mart will
employ far fewer people than several smaller,
independent grocery shops.
• Supermarkets have the potential to kill a valuable
part of Indian culture and community, and destroy
millions of livelihoods.
• Most Indians shop in small general stores
called Kiranas. Nestled in every neighborhood,
these tiny family-run institutions stock every
imaginable grocery; with 50 million in the country
and form an important part of many communities.
• It is said that multi-brand retail will provide
adequate scientific storage and thereby save
millions of tonnes of food grains from rotting but FDI
is already allowed in storage, and no investment
has come in.
IMPACT OF FDI AROUND THE GLOBE
• Wal-Mart had captured nearly 50 per cent of
Mexico’s retail market in 10 years. The Mexican
subsidiary of Wal-Mart, which opened 431 stores in
2011, had paid bribes and an internal enquiry into
the matter has been suppressed at corporate
headquarters in Arkansas.
• In Bristol last year, hundreds of people took to the
streets to protest against a new Tesco supermarket.
The store was being built in a diverse area; locals felt
a strong sense of community, and were deeply
unhappy about a multinational corporation
competing with independent and local shops.
• From the successful experiments in countries like
Thailand and China it is noticeable that FDI in the
retail sector was first met with protests, but later
turned out to be one of the most promising political
and economical decisions.
• It led to the commendable rise in the level of
employment and enormous development in
A START HAS BEEN MADE
• The RBI has amended various rules to bring them in
line with the new policy to allow FDI in multi-brand
retail, aviation, media and power sectors.
• The gazette notification permits 100% FDI in single-
brand retail trade and up to 51% in multi-brand
retail. Ten states have agreed to FDI in multi-brand
retail according to the gazette notes.
• Walmart has a joint venture with Bharti Enterprises
for cash-and-carry (wholesale) business, which runs
the ‘Best Price’ stores. It plans to have 15 stores by
March and enter new states like Andhra Pradesh ,
Rajasthan, Madhya Pradesh and Karnataka.
• Foreign retailers who first invest in the back-end supply
chain and infrastructure would be allowed to set up multi
brand retail outlets in the country.
•The idea is that the firms must have already created jobs
for rural India before they venture into multi-brand
• One of the arguments which inevitably needs to be
considered and addressed while deliberating upon the
captioned issue is the interests of consumers at large in
relation to the interests of retailers.
• With the advent of FDI flows in retail market, the interests
of the unorganised retailers will not be undermined as
nobody can force a consumer to visit a mega shopping
complex over a small retailer/sabji mandi.
• Consumers will shop in accordance with their utmost
convenience, where ever they get the lowest price, max
variety, and a good consumer experience.
• Have supermarkets had a positive impact on your
life and community?
• Should governments be able to control where
businesses can trade?
• The presentation began with the meaning of FDI and FII. The presentation
told us about the entrance of FDI in India and agitation caused by
• It includes the impact of FDI to various sectors both positive and negative
such as technology, economy, employment and consumers.
• The various arguments made by people in regard to FDI are also
included in presentation.
• It is necessary to know some other countries where FDI came and had
good impact in various sectors like China and Indonesia which was
• Also new developments made in direction to welcome FDI have taken
place and was discussed thereafter.
• Lastly, we concluded by saying that in such economic conditions FDI
should be welcomed to bring some prosperity.
• At the end we had question- answer session where the audience asked
us questions by framing various MCQ’s.
• It was a good presentation and appreciated by
• It was an interactive session conducted where we
asked questions to audience and they asked us
• An informative presentation covering important
points of the topic.
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