Fdi (1)

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Fdi (1)

  1. 1. FDI IN RETAIL SECTOR
  2. 2. INTRODUCTION • 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 transporters etc. • 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 multinationals.
  3. 3. EFFECTS OF FDI ON Technology Employment Economy Consumers
  4. 4. TECHNOLOGY • Wastage and storage problem will be resolved • Efficient logistics, production and distribution channels • Distribution and warehousing technologies • Foreign retail companies have immense supply chain expertise and guaranteed efficiency.
  5. 5. EMPLOYMENT • 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.
  6. 6. ECONOMY • 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 costs. • 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.
  7. 7. CONTINUED… • FDI in organized retail could help tackle inflation, particularly with wholesale prices. Growth of infrastructure. • 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.
  8. 8. CONSUMERS • Safety & quality standard will be quite high which will improve overall shopping experience of consumers. • 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.
  9. 9. ARGUMENTS • 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.
  10. 10. CONTINUED… • 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.
  11. 11. 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.
  12. 12. • 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 country’s GDP.
  13. 13. 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.
  14. 14. • 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 retailing.
  15. 15. CONCLUSION • 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.
  16. 16. YOU DECIDE?? • Have supermarkets had a positive impact on your life and community? • Should governments be able to control where businesses can trade?
  17. 17. REPORT • 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 common man. • 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 discussed. • 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.
  18. 18. COMMENTS • It was a good presentation and appreciated by mam also. • It was an interactive session conducted where we asked questions to audience and they asked us too. • An informative presentation covering important points of the topic.

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