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Retail FDI in India
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Retail FDI in India

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The new state government in Delhi, Aam Aadmi Party( AAP) has blocked retail FDI in Delhi thus disappointing many industrialist, Investors, political parties and maybe even farmers who are longing for …

The new state government in Delhi, Aam Aadmi Party( AAP) has blocked retail FDI in Delhi thus disappointing many industrialist, Investors, political parties and maybe even farmers who are longing for fair prices for the products sold by them to the middlemen.The article focuses the basics of FDIs and argues the step taken by the State Government of Delhi.

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  • 1. © 2013 Deena Zaidi. All rights reserved.
  • 2. What is FDI? Foreign Direct Investment(FDI) is when an individual or a company of another country makes a direct investment into production/ business of another country. For this, it either buys the target country’s company or simply expands its existing business in that country. FDI can also be done through mergers and acquisitions by acquiring target company’s shares or through joint venture. © 2013 Deena Zaidi. All rights reserved.
  • 3. Why do we need FDI for economic growth? We need FDI for economic growth of a country if that country lacks technical know-how and domestic capital . For a developing nation, FDI helps in getting foreign capital, which is seen as a temporary measure during the development of capital markets. It boosts savings and brings additional employment to the country. © 2013 Deena Zaidi. All rights reserved.
  • 4. FDIs were introduced in 1991 under Dr. Manmohan Singh under Foreign Exchange Management Act (FEMA) FDI IN INDIA Delhi NCR is the single largest retail market in this country The predecessors of the Aam Aadmi Party, Delhi CM Sheila Dikshit had allowed FDI retail stores to be opened in Delhi, not a single store has been opened so far. With the appointment of Arvind Kejriwal, AAP blocked FDI retail outlets in Delhi ,thus, fulfilling its election manifesto . © 2013 Deena Zaidi. All rights reserved.
  • 5. AAPnomics – a boon or bane? • On 13th January, 2014, the new government of Aam Aadmi Party wrote to the Department of Industrial Policy and Promotion that no FDI retail funded stores would be allowed in New Delhi • They argue that blocking retail FDI will protect the interests of farmers and retailers. © 2013 Deena Zaidi. All rights reserved.
  • 6. Blocking FDI is not a good idea! It seems that AAP has no arguments as to why they have blocked retail FDI in Delhi. The decision has not gone down too well with opposition parties and the industries. Delhi anyways has not had any FDI retail outlets so far since most are located in Noida, Gurgaon and Faridabad. By blocking Delhi as entry for FDI retail outlets, foreign companies will now look at other regions like Mumbai and Bangalore for FDIs. © 2013 Deena Zaidi. All rights reserved.
  • 7. AAP argues that it tends to protect the farmers and jobs of the people associated with the industry. However, it is quite the contrary By allowing FDI, AAP fails to understand that it will help farmers to be directly linked to the retailers. They will not be exploited by the complex structure of middlemen which pays them much less than what the farmers deserve. The direct association of farmers with retailers will make deliveries timely, reduce the wastage of food and bring inflation down by cutting the middlemen’s unrealistic margins. © 2013 Deena Zaidi. All rights reserved.
  • 8. © 2013 Deena Zaidi. All rights reserved.
  • 9. http://www.allbankingsolutions.com/BankingTutor/FDI-in-India.htm http://www.firstpost.com/business/as-aap-blocks-retailfdi-foreign-retailers-window-into-india-shrinks-further1337569.html http://www.ndtv.com/video/player/left-rightcentre/aapnomics-making-industry-nervous/305336 http://economictimes.indiatimes.com/opinion/editorial/ aap-should-not-ban-supermarketfdi/articleshow/28810930.cms http://timesofindia.indiatimes.com/business/indiabusiness/Blocking-retail-FDI-to-rob-India-of-1-crorejobs/articleshow/28807283.cms? R e f e r e n c e s © 2013 Deena Zaidi. All rights reserved.