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ROHIT SAINI
12118067
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
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.
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
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
Farmers
Consumers
MSMEs
Small retailers and wholesalers
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
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
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
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
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
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
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
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
Enhancing competition between large & small retailers
Improved product quality and lower lower retail prices
Greater degree of consumer protection
Growth in Economy
 Job Opportunities
 Benefits to Farmers
Benefits to consumers
Lack of Infrastructure
Cheaper Production facilities
Availability of new technology
Long term cash liquidity
Conducive for the country’s economic
growth
FDI opens up a new avenue for Franchising
FDI in retail

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FDI in retail

  • 2.
  • 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.
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  • 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
  • 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