An embattled UPA government has hung the ‘Open’ sign for foreign retailers. The cabinet said OK for 51% FDI in multi-brand retail sector & 100% FDI in single brand. On one hand farmers will benefit from it but on the other hand small traders feel they will not be able to withstand the competition. Will India in general benefit from this step?

1. ROHIT SAINI
12118067

3. India is now the last major frontier for globalized
retail
In the twenty years since the economic liberalization
of 1991, India’s middle class has greatly expanded
India has been slow to open its retail sector to foreign
investment
In 2006, the government eased retail policy for the first
time allowing up to 51 per centFDI through the
singlebrand retail route

4. NOW supermarket chain stores such as Wal-Mart
(United States), Carrefour(France), Marks & Spencer
and Tesco (United Kingdom), and Shoprite
(South Africa) may finally be allowed to set up shop in
India.

6. Vertical issues specific to product groups eg.
Food standards, nutrition & safety
Horizontal issues related to greater competition :
large vs small retailing
Consequence of economic growth , rise in gdp ,
and standards of living
Political implication for vote bank and their
contestants

7. Better compliance to standards eg. Food
standards and their compliance
Better nutrition, safety and labeling for
consumers
It could reduce corruption in food control
system

8. Farmers
Consumers
MSMEs
Small retailers and wholesalers

9. Provides alternative buyers to agri. Mandi
under APMC regulations
Introduce contract farming to farmers
Possibility of quality agr input and sound
technical advise
Reduce exploitation of farmers at mandis

10. Opportunity for scaling operations as large
retailers have economies of scale
Long run supply contracts for private labels
owned by large retailers
Can circumvent distribution channels to sell
direct to retailers
Case in point: auto ancillary producers have
scaled operations due to auto fdi

11. Greater competition at retail will bring down retail
markups and profits
Traditional retailers will have to work harder and
innovate to maintain sales in face of completion
No immediate threat to their existence but impact
will show over medium and long term

12. No visible impact in spite of fdi in cash and carry
wholesale by metro , walmart
They will continue to serve traditional retailers but
margines to come down due to downward price pressure
Will slowly lose market share over medium and long
term gradual change

13. Downward pressure on retail prices will provide
consumer savings
Below mrp will become the norm
Greater quality, choice for consumers
Availability of low priced products for bottom of the
pyramid with large scale sourcing

14. Improve food quality & protect Indian consumers
from risk food borne illnesses due to microbial
pathogens, bio toxins chemical or other contaminants
in food
Encourage hodistic approach from farm to table to
reduce for borne hazards for consumers
Adopt modern principles of risk analysis based on
batter scientific knowledge of food borne illnesses
and preventive measures for food safety and quality

15. Bring the best practices in value chain to Indian
consumer
Food standards should include components that will
enhance the level of nutrition and human safety from
the health point of view
Truth in communication on food labels and in food
advertising

16. Improving the level of public safety from human
risks from the food related illnesses to reach global
standards
Better implementation of food standards
Improved consumer awareness about quality safety,
nutrition and standards for a healthy lifestyle

17. Enhancing competition between large & small retailers
Improved product quality and lower lower retail prices
Greater degree of consumer protection

18. Growth in Economy
 Job Opportunities
 Benefits to Farmers
Benefits to consumers
Lack of Infrastructure
Cheaper Production facilities

19. Availability of new technology
Long term cash liquidity
Conducive for the country’s economic
growth
FDI opens up a new avenue for Franchising