The document discusses the potential impacts of allowing foreign direct investment (FDI) in retail trade in India. It notes that India has over 125 million retail outlets currently owned by families that employ around 4 million people. Previous experiences in other countries show that when large foreign retailers enter the market, they rapidly capture a large share and many small local retailers are forced to close down, resulting in unemployment. The document expresses concerns that FDI in retail could similarly displace many small Indian retailers and generate unemployment. It calls on the government not to permit FDI in retail in order to protect domestic retailers and employment.

1. FDI IN INDIA

2. THINGS TO REMEMBER
 Before we go ahead, we should keep certain basic facts in
our mind.
 We are a country with huge population out of which majority
are unprivileged and Below Poverty line.
 We are people with tradition, culture and ethics.
 In our country it is very difficult to get alternate employment.
 Our survival is because of our collective strength.
 The Govt. policies have been anti growth oriented for traders.
 The traders voice is not heard by decision makers.
 In fact traders have no representation in Govt.
 The decision makers do not ever hear him on policy matters
affecting his trade.

3. LICENCES & PERMITS
INDUSTRIAL DISPUTE ACT
SHOP & ESTABLISHMENT ACT
COSUMER PROTECTION ACT
WEIGHT & MEASUREMENT ACT
PACKAGING ACT
PREVENTION OF FOOD ADULTRATION ACT
PREVENTION OF BLOCK MARKETING ACT
ANTI HOARDING & PROFEELING ACT
MONEY LENDING ACT
PRODEND FUND ACT
MINIMUM WAGES ACT
ESI ACT
GRATUITY ACT
BONUS ACT
INEFFICIENT
LABOURS
PRESENT CONDITION OF TRADERS
INSPECTOR RAJ
POLITICIAL INTERFERANCE
ANTI SOCAL ELEMENTS
WATER TAX
POWER PROBLEM
HIGH BANK
CHARGES
SALES TAX
OCTROI
SERVICE TAX
WELTH TAX
PROFESSIONAL TAX
INCOME TAX
ENTRY TAX
VAT
STAMP DUTY
POOR MARKET
CONDITION
PURCHASE TAX
ESSENTIAL COMMODITIES ACT
CENTRAL
EXCISE
FDI in Retail Trade
Fringe Benefit Tax
New Naka Complex
Cash Transaction Tax
&
Quarterly ‘C’ Form

4. Retail Traders
Telecom
Aviation
Banking
Insurance
Steel
Information
Technology
Infrastructure
Pharma
Mining
Professional
Education

5. RETAIL TRADE :
BACKBONE OF ECONOMY
 Retail trade is world’s oldest business.
 Retail trade consists of sale of goods & services to consumers
for their personal, family or household use.
 Based on turnover and volume, retail trade is worlds biggest
economic activity.
 In the year 2000, world turnover in retail trade is estimated
around Rs. 3,10,20,000 crores.
In India by investing nominal Capital a person can start retail
business.
In India Retail shops are generally owned and run by family.
The whole family gets self employed.

6. HISTORIC CONTRIBUTION BY TRADERS :
During Pre-independence days the traders have helped
the leaders in all forms like man power and money.
In all social activities & establishment of schools, colleges,
hospitals mandir, masjid etc. traders have contributed.
Round the year 24 hours a day, traders have made all the
goods required by customer available to them
During the days of acute shortages, the traders have
some how managed to arrange goods for its customers.
Relationship of Indian traders and customers is much
more than mere business
Indian traders have always seen customer satisfaction
above personal profit.

7. SUPPORT AND HELP
TO GOVERNMENT
 Traders are self employed and give employment to entire
family and others.
 Traders give employment to that neglected section of society
who do not get employment any where.
 Traders take care of entire family of his employees.
 All direct and indirect taxes levied by Central, State and local
govt. are deposited by trader in Govt. treasury without any
charges or commission from Govt.
 During famine, floods, earthquakes tsunami and other natural
calamities, the traders have always come out openly to
extend full help to Govt.

8. TRADERS BEING IGNORED
BY GOVEREMENT
 In Order to gain political mileage, traders have been termed
by objectionable words.
 After independence one after another anti trade, anti trader
laws have been made.
 Traders have been made slaves under Inspector Raj.
 Time & again new legislatures are being imported. Small
Traders have been put under heavy burden of book keeping,
taxation and compliances under various laws.
 In the name of development and road widening the shops
are being demolished only to give passage to hawkers and
footpath shopkeepers to establish their business.
 Local Govt. failed to build new markets. old traditional
markets in different localities are being removed to make way
for Big stores to get customers.

9. CONTRIBUTION OF TRADERS
IN ECONOMY
 In comparison to world, India has largest number of retail
traders.
 In our country there are about 1,25,00,000 retail out lets.
 Retail trade contributes about 10% - 11% of our country’s
GDP.
 Total turnover of retail sector is about Rs. 8,75,000/- crores.
 After agriculture, Retail trade provides employment to
maximum number of persons.
 1.25 crore shops are providing employment to about 4 crore
people.
 In a study conducted by Reserve Bank of India, India Retail
Traders charge less margin.

10. FOREIGNERS ARE MORE
DEARER THAN INDIANS
 Indian traders, Businessman and Industrialists have established their
leadership across the world.
 India is emerging as a big economic power.
 Our country is progressing in all economic fields.
 We have lagged behind in infrastructure, irrigation power etc. i.e.
such sectors which were under control / monopoly of Govt. We
could not grow to full potential in such sectors.
 These infrastructure sectors require huge investment with larger
gestation period. Hence special emphasis has to be given to these
section.
 It is unfortunate that instead of focusing development of such core
areas the govt. want to hand over our established retail trade to
foreigners.
 It is surprising that suddenly govt. feels that our traders are
incompetent to serve the people or handle retail shops OR in disguise
of Foreign Direct Investment our retail trade is being sold to
foreigners.

11. WHAT WAS THE CRITERIA
FOR FDI
 Some time in 1991-92, the then Finance Minister and
present Prime Minister Dr. Manmohan Singhji referred to
certain criteria for allowing Foreign Direct Investment.
These were :
1. Establishment of basic industries requiring huge capital
and advanced sophisticated technology.
2. Infrastructure projects like electricity generation road
building etc.
3. Projects which would generate employment

12. WILL THIS HAPPEN WITH FDI
IN RETAIL TRADE
 Throughout the world it is known fact that huge
investment is not required to open a retail shop.
 Investment is required to build infrastructure for
shop, sophisticated technology is not required in
retail trade.
 Small Retail shops provide more employment then
large chain of Retail stores.
 There is no gestation period. Hence business starts
from day one.
 Instead of developing under developed areas
these stores capture prime commercial property in
cities.

13. WHAT DO
FOREIGN / MULTINATIONAL
COMPANIES DO
 In 60s Big foreign houses entered in retail trade in other parts
of world.
 This is against our culture of “One family One shop”.
 These big companies, in order to crush competitors sell goods
cheap. Later on effective prices of goods are increased.
 These companies buy material from International market.
Hence local producers are put to loss
 These companies buy in bulk quantities directly from
manufacturers. The intermediaries loose business.
 After conquering the markets of Europe and America, these
companies have now entered Asian markets.
 After establishing their footings in Thailand, Indonesia, China,
Japan, Philippines, etc in Asia, these companies are now
targeting India.

14. EMPLOYMENT GENERATION
UNDER EXISTING SYSTEM
 FARM LABOURS
 HAMALS
 DALALS
BROKERS
TRANSPORTERS
TEA SHOP OWNERS
HOTELS
DHABAS
SHOP KEEPERS
ALL WORKS IN FARM BY MACHINE UNDER CORPORATE FARMING
AUTOMATIC TRANSFER AND PACKING BY MACHINES.
SALE TO CUSTOMERS THROUGH CHAIN OF DEPARTMENTAL STORES.
LARGE NUMBER OF SELF EMPLOYED TO BECOME UNEMPLOYED.
AFTER M.N.C. TAKE OVER

15. WHAT WILL HAPPEN TO RETAIL TRADE
 These companies open chain of shops. With a shop in each area the
retail small shopkeepers will be put to heavy loss
 Slowly the local shops will start closing down.
 These shops will capture the trade.
 In countries where they have established their market share is
Name of Country % of Market Share
America 80%
England 80%
Western Europe 70%
Brazil 40%
Thailand 40%
Korea 35%
China 20%
Malaysia 20%
India 3%
 Remember example of ‘BATA’ in shoe business.
 Imagine Roadside DHABA’s after RELIANCE FOOD CHAIN Starts
working.
 Cold drink business in India.

16. WHAT WILL HAPPEN TO
LOCAL RETAIL TRADE
 No of Retail outlets Between 1981-99 in United
Kingdom came down from 56862 to 25800.
 Between 1970-80 in Europe about 4 lakhs Retail
shops were closed.
 Competition shall be limited to Big Retail Houses
 In the year 2000 Five Big Fast food companies
captured following percent market share :
Country % Share
Norway 99
Swezerland 88
Sweden 94
UK 64
Portugal 57

17. WHAT HAPPENED IN THAILAND
 In price war traditional shop keepers are facing problem of
survival. Many small shop keepers have closed down their
shops.
 Big companies have seen growth of 40%
 There was adverse impact on 60000 small shopkeepers.
 A small shopkeeper fired rocket in Big shop & committed
suicide," frustration”.
 The Prime Minister of Thailand agreed that there was adverse
impact on retail trade.
 The Govt. which had opened its door for FDI in retail trade
with big bang had to provide financial assistance to retail
traders by establishing a special fund.

18. WHAT HAPPENED IN CHINA
 There is a race to capture more & more space for
retail trade.
 There is allegation of flouting the norms on these
stores.
 There is anger against these companies amongst
general public.
 Media is also reporting how traditional shops have
been thrown out.
 The suppliers and manufactures are also facing
problem. These are closing down.

19. WHAT HAPPENED IN OTHER
ASIAN COUNTRIES
 Other countries are also unhappy. Many countries have
started taking precautions.
 Indonesia and Malaysia have established zones within which
these foreigners can do trade.
 In Japan Big companies have to discuss with small traders.
There is Zoning system also. Hence these companies have to
establish their shops outside city limits.
 There is wide discontent amongst shopkeepers & people in
the countries to which these store belong.
 The city counselor of California & Chicago have refused to
allow opening of new shops to WALMART.
 These shops are required to take permission in countries like
France, Germany and America.

20. NOW ITS TURN OF INDIA
 The tough stand taken till recently by Central Govt., Foreign
Retail Traders could not enter India.
 It is unfortunate that Central Cabinet has given approval to
FDI in Retail Trade.
 Shift of Major retail trade to these big companies will render
small traders & their employees unemployed.
 Many companies with the help of contract farming will sell
goods produced in farms directly from their chain of stores.
 After establishing control over purchases & sale these
companies will start dictating.
 These companies will keep only graduates and above in their
employment. There will be no scope for employment to
under graduate and others.
 In the event of non receipt of payment of supplies, it
becomes impossible to reach owners.

21. M.N.C. REGIMEM.N.C. REGIME
CONTRACT FARMING
COLLECTION OF
AGRICALTURE PRODUCTS
TO OWN FACTORY
TO OWN DEPT. STORE
TO CUSTOMER

22. REQUEST STOP FDI IN
RETAIL TRADE
 If Domestic Retail Trade is allowed by Big MNC’s etc., there
will be Large Scale Unemployment.
 A new class of unemployed called “Unemployed Traders”
will join the existing force of unemployed persons.
 These companies will sell internationally procured products.
Domestic Industry will suffer.
 Everybody knows how Big Fish eats away small fishes.
 Keeping the experience of other countries in mind, Govt.
should not take any such decision for which the whole
country and coming generation will have to suffer.

23. SELF EMPLOYMENT IN INDIA
 India has huge force of unemployed persons.
 Govt. has failed to generate need based
employment..
 Majority of people in India are self employed.
 The Major area of self employment is Agriculture
and Retail Trade .
 The farmers problems were not addressed timely.
They are committing suicide.
 WHAT is the future of Indian Traders in India?
 WILL next generation pardon us?

24. WHAT SHOULD GOVT. DO
 Govt. should identify the weakness of present
retail trade.
 Govt. should specify the areas where customers
are not being served properly.
 Govt. should specify what it expects from retail
trade that is not being met presently.
 Govt. should publicise the sector / persons who
have demanded FDI in Retail Trade.
 Govt. should come out with white paper on FDI in
Retail Trade specifying the picture after 25 years
and 50 years.

25. INDIA : MY COUNTRY
DON’T SEE INDIA AS POPULATION OF ONE HUNDRED CRORE
MOUTHS TO FEED.
SEE IT AS A MARKET OF ONE HUNDRED CRORE CONSUMERS WITH
TWO HUNDRED CRORE EYES TO WATCH YOUR PRODUCTS AND
TWO HUINDRED CRORES HANDS TO BUY YOUR PRODUCTS.
WORLDS LARGEST EMERGING RETAIL MARKET : WHO WILL
CONQUOR IT : WE OR THEY?
DO NOT MAKE GOVEREMENT AS,
 GOVEREMENT BY MNC
 GOVEREMENT OF MNC
 GOVEREMENT FOR MNC’S