Welcome FDI in retail
Posted on July 8, 2010 | View 895 | Comment : 36
Without conditions, with rural reform.
The new discussion paper on foreign direct investment (FDI) in multi-brand retail is welcome, if it is, indeed, a prelude to considered, consensus-building innovation in policy. India needs organised retail, as it urbanises and prospers. And retail will get organised, just as surely as motorised transport replaces haulage by animal power in a modernising economy.
The question is, should the shift take place, aided by the capital, competition and knowhow that foreign investment brings with it, or without these benefits?
Clearly, except for some existing Indian retail operations, the bulk of the Indian economy would gain, significantly, from the emergence of a well-capitalised retail industry that brings the latest technology and management practices to build modern supply chains in India, connecting country and town, connecting small producers with national, and even global markets.
The creaky, old distribution system that India has lived with so far has a major flaw: cornering most of the rise in prices arising from higher demand for rural produce, it greatly distorts the price signals for farmers.
This, in turn, hinders the secular rise in farm output that a prospering India desperately needs and cannot be delivered by the government hiking individual support prices, which only shifts acreage from crop to crop without raising the output levels of all crops.
The discussion paper is silent on some vital issues. One is the organisational form of rural producers as they interact with Big Retail. Small farmers can undertake contract farming, but have no bargaining power and will be at the mercy of their buyers.
Small producers organised into something like Amul are a different kettle of fighting fish altogether. But who will organise them into farmer companies or producer cooperatives that can increase the value-add before sale to the buyer, and have sufficient bargaining power?
Then again, without rural electricity and largescale new investment in surface water management, farmers would be hard put to produce more, even with technical inputs from Big Retail. These concerns must be addressed while allowing FDI in retail.
Comment
Comments (36)
- How long will the trder oriented politicians like the bjp continue to support inefficiencies for the sake of politics. hope there comes a time when some wisdom prevails in their thinking process soon
Posted by jogesh grover , ceo at RMS Digiscan | 30 Nov, 2011
- although Indian rural market is not organized yet it has very deep roots and upto some extent it has saved Indian Economy through Recession. It is true that India needs organized retail sector but its rural sector should be organized first . There should be organisatios which should assist the small farmers in getting latest technology, finance,wharehousing, and profit shareing with retail sector so that farmers can get maximum profit against their produce .
Posted by Dinesh Singh Parihar , company Salesman at Hindustan Unilever Ltd. | 17 Jul, 2010
- FDI will change Indian retail scenario . In fact Indian retail desperately needs FDI. At present Indian retail can't be called as ORGANIZED and in any way is not befitting people the way it should,
Posted by Kunal Bakshi | 15 Jul, 2010
- FDI in retail is badly needed if we are looking for the development of our country. 100% FDI should be allowed with immediate effect.
Posted by rahul kumar | 11 Jul, 2010
- FDI in retail is a good move considering high rent paid by the existing shop owners in high streets. FDI in retail would not only bring world class management on real estate which will reduce the rent to be payable by an ordinary brand in India. Also farmers will be benefitted by having a direct procurement of goods and be transparent to the farmer knowing the price to the end consumer. This price varies state by state, city by city because of lot of middle men handling the goods and prices. It doesnt significantly assert that the middle men would lose their jobs- instead they will also be a part in modern retail because of the expertise they have, which inturn would be useful for modern retail.
Posted by ajith | 11 Jul, 2010
- FDI in retail is a wlcome move,but the interest of the poor farmers must be seen.It must be remembered that India is a poor country where rural economy has to be given support.
Posted by Jaydeep Basu | 11 Jul, 2010
- In Retail MArket Indian compny Are not Success Because Of High Rent Of Property.& The Property Finalizer Take commission from property owner so the rent of that property is high .due to that reason store profit is minimized & store maintenance cost is up.
Posted by sujeet kumar jha , ast store manager at rei sixten retail ltd | 11 Jul, 2010
- As the cost of producing the crop and storage is increasing .You need new technology not only to product the same but also to storage the same food .E.g we are milk access in production but what is the wastage. The cost of milk is increasing today .
As traders has a field day as of producers and consumers which are both at loss .As the traders do not invest in technology .Their main interests is to hold food produced till the price is right to sell it in the market .This create shortage in the market ,To sell it at increase price.
All ready the government is feeling the heat .Also if retailers or FDI is there in retail new jobs ,new technology will come to set up out let in India .They will benefit the farmers and also the consumers will benefit which is ...See More
Posted by mahesh r | 10 Jul, 2010
- i think that FDI in retail should be welcomed as it increases the more job opportunities plus it increases the level of competition in Indian Retail Sector. In turn, beneficial to customer.
Posted by Nirav Lakhani | 09 Jul, 2010
- FDI in retail is very good as it will bring quality in retail and help in employement generation.
Posted by ashok kumar singh , Area Sales Manager at Mother dairy Fruit and vegetable pvt limited | 09 Jul, 2010
- It is a very grate move, we require some one who definitely give good salaries to the staff whom they hair. If salaries are in good structure to the staff, any retail stores will grow in no time, at the same time there should not be any hindrance factors should be there.......... Any retail operators in India specially should concentrate on the below cadre employees then the investors will no need to look back on their investment returns.............
Posted by Bala Subramanyamm.BVSS , Area Sales Manager - EX at M/s.Royal Sporting House ( RSH Distrubutions (I) Pvt. Ltd., | 09 Jul, 2010
- it is a good move, take it forward
Posted by vittal kakade , vp at consulting | 09 Jul, 2010
- FDI was waited over for a long time, even the ruling party at a time seemed not too much in favor. Nevertheless, opening FDI in retail would be a welcome step and also from a long term perspective. all said and done Indian retail is yet struggling apart form the investment factor, also from back end support and bigtime knowledge support. Today, after 10 years of organised retail, no one can tell what is the shrinkage. We may understand what is causing it but not geared to act on it, one reason being lack of knowledge to control it. There has always been a lot of support from the organised retailers for FDI in retail the opposition has only been from non retailers, not realising what organised retail can bring on the table to cater to the economy at large. Opening up retail may also add ...See More
Posted by Tapan RoyChoudhury,Retail Consultant at G K TEXTILES|09 Jul, 2010
- We should learn lesson from china where major players on reatils have not successed greatly even some have closed down i do not think any retailer will come to establish or build supply chain and if at all they do it will for the benifit of them and no others yet we are a country where a very large % of population cannot feed them once properly and many at alrge even can dream of shopping in this luxury , as they buy essentials to sufice them for one meal or a day , then what are we talking about 10 to 15 % of population 10 to 20% of retail, we should tread the path with lots of understanding and catuian
Posted by Homiyar Tavadia , MTAS at HUL | 09 Jul, 2010
- FDI in Retail is a very positive step.The Govt should look into policies which should be focussing on two aspects , One where the infrastructure in Supply chain should be to lower the end price i.e Customer is the king , Food products and Food chains should be welcome in the Country.Second is creation of Jobs in this sector.There is a Large scope of lowering Food prices through this initiative.
Posted by Deepak Bahl | 09 Jul, 2010
- We don't need any more foreign investment in India.Day by day India's population is growing on ,so we don't want our business units to become jobless.
Posted by Pankaj Miglani , businessman at xyz | 09 Jul, 2010
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FDI in organised retail is long awaited; finally, GoI is giving green signal. I feel GoI did the right thing to delay in allowing FDI in retail.
Currently, Indian Retail industry is going thru second phase of transformation. During 2005- mid 2009 period, it was the phase I as ground work for the promoters at all levels, from producers (manufacturers & farmers) upto consumers. As the threat of recession got over in mid-09, ground was ready for allowing FDI.
...See More
Posted by sujit chakrabarty,|08 Jul, 2010
- Yes, I do agree that FDI in Retail should be approved.But there has to be some regulatory board to monitor that FDI should not hamper the small time farmers,there has to be some serious thinking to be done to safe guard our farmers.
Posted by B A Subramani , DGM at Lakhani India Ltd | 08 Jul, 2010
- FDI in Retail is gonna have boom ,,it is too good for grow of economy as well as people welfare ,,organized retail in India is still approx 5-7 %,,and we are very lack in trained people we still do not have many trained person who knows international standards in Retail ,which is most important for profitability ,growth,,and in customer service ,
Posted by Ashish shrivastava , Store Manager at Unistyle Image Retail Pvt Ltd | 08 Jul, 2010
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FDI in retail should directly and indirectly achieve the following:
1. Improved farm equipment
2. Higher agricultural yield
...See More
Posted by Rajul Kothari | 08 Jul, 2010
- I think the gov must open the retail sector in a phased manner starting with stores of luxury or lifestyle merchandises, as it hardly makes a difference to the daily life style of majority of us.This will give chance to all of us monitor the progress of this opened areas of retail and at the same time give the govt a chance to minitor and rectify their mistakes as they go ahead with the opening in other areas in retail
Posted by VIJAY A PATEL , Manager at TRENT LTD | 08 Jul, 2010
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FDI in retail will only ruin the bargaining power of rural India, it will hinder a fair & just distribution of income & livelihood of millions of Indians who produce and consume these multi brands.
Whereas in the urban India it may create cartels & monopoly conglomerate companies with their Indian arm who would suck the urban consumers in the pretext of value for money for products & services where there is actually no value addition at all.
...See More
Posted by Ramesh Parakkat | 08 Jul, 2010
- I remember reading about what Pepsico did for getting better potatoes for Lays. Everybody knows how they worked along with the farmers to increase output, size & quality of potatoes. Consumers, farmers & the company all benefitted. They bring superior tried & tested techniques to the backend. For brighter future & better prospects Fdi is a must. When these big companies come in, they would also get a lot of the infrastructure improved as they need it, which at the same time will benefit Indians too. More schools will also get opened & rural kids will get a better advantage & start in life. It would also put behind a lot of the fiefdom which is being practiced in the villages. The farmers would not have to depend on middlemen for selling their produce.
\Who will organise them is not ...See More
Posted by Kalpana Rao | 08 Jul, 2010
- MNCs do not come with a view of developing Backend infrastructure. Like investors they come make profits and move on. if we look around we shall realize that most important feature to attaract FDI and MNC has been availability of infrastructure. This can also be established by pattern of FDI/ MNCS available in states such as Gujarat, Karnataka compared to UP and Bihar will weeker or lower infrastructure development.
It was Tata who developed jamshedpur to avail the wealth of natural resources available there. Although these resurces are in abundance in various parts of the country even today yet we do not see any interest from MNCs on them.
Having these big players in Retail will put even more strain on farmers as these big enterprises will come with tremendous leverage and ...See More
Posted by Mohd Suhail Khan | 08 Jul, 2010
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A presumption that MNCs will invest in backend infrastructure, which will reduce the farm losses and improve farmers’ profitability is probably not as realistic as being talked………………I don’t see any MNC investing large money for creating back end infrastructure for sourcing of farm produce in any country.
Presuming that backend investment criteria for approvals will be defined and monitored effectively is also a very optimistic thought……
Therefore, instead of going for FDI in retail, domestic industry should be given incentive to create backend infrastructure for sourcing, storage and movement of farm produce. There are many business houses in the country looking for large investment opportunity for making profitable business.
...See More
Posted by Ripu Daman Singh | 08 Jul, 2010
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FDI in Retail is good but should have restrictions.
India already has millions of Shops across the length & breadth of the country. No merchandise sold at large format retail are different from what is sold at these shops leaving apart designs, early arrivals etc.. Much needed is the funds to accelerate the growth of Rural India.
...See More
Posted by Srinivasan , Dy.GM at Erudite Knowledge Services Limited (Future Group) | 08 Jul, 2010
- FDI IN RETAIL IS MUST IN INDIA , IT WILL CERTAINLY MAKE ECONOMY GROW AS IT WILL INCREASE CONSUMPTION.
Posted by michael pinto , manager retail operations at gitanjali group | 08 Jul, 2010
- FDI is one of tool with which definately there would be huge turn around in the retails sector. We have skilled man power at resonable rates with good producers at domastic level but introduction of technology is must, which is only possible with FDI.
In retail we have to closely monitor every single penny expenditure which can ultimately play huge roll at the end of FY and technology will play surely vital roll in that. It will enhance the margines and open the market to take risks inj new segments. Like Mr. Binani said in his last interview that not only FMCG but other segments like furniture, IT, House Hold needs to be give more attention, which is giving bright sign with FDI's, as FMCG only contributes 40% in retail.
Posted by Mukesh Chander , Asst. Manager-Supply Chain at Ballarpur Industries Limited | 08 Jul, 2010
- you have to be very active to control these type of things, people who are staying at these areas are not that much educated when you compare to A1 Grade cities. If once it gets success int the B grade cities it is unstopabble for any one. Hope FDI will have success
Posted by Krishna , Purchase manager, Daywell electronincs at Daywell Electronics | 08 Jul, 2010
- FDI in retail is indeed good for India.It will not only be beneficial for customers but also for the people working in this sector.We have to make use of the retail industry potential in a more organised manner, if we want to keep our growth level intact.Therefore,there shoud not be any second thought about it.
Posted by Sharmila Das | 08 Jul, 2010
- There is no second thought about the benefits this FDI shall unleash. If we want to keep pace with the global growth we have to find ways whereby the social angle can be taken care of and at the same time, our retail industry can also perform up to its potential. The sheer size of Indian retail Market can not be left untapped for long. I am for it.
Posted by Manish Sharma , GM & Head - Retail at Bikanervala Real Estates Pvt. Ltd. | 08 Jul, 2010
- I appreciate the move of allowing FDI in Retail. This is what the industry need at this point in time. With this modern technologies will improve the back end funtioning, Merchandising methods, Customer care techniques, fast and accurate billing and above all to improve in reduction of Shrinkage (Which is maximum in India)
Posted by Prashant Batra , Business Development Manager at Retail Industry | 08 Jul, 2010
- excellent , i endorse the same
ABHISHEK TRIPATHI
Posted by Abhshek Tripathi | 08 Jul, 2010
- I appreciate this move becasue day by day urbanisation is onincreasing trend. Customers will get more choice, awareness pf products and gives rural employment also. This move may help our villages to get better facilities apart form perosnal growth of companies. It is 100% welcome act. - regards - VV Chary
Posted by vedala venkatachary , Commercial manager at Ushodaya enterprises pvt ltd | 08 Jul, 2010
- FDI in retail is definately Good for India. We have just 5% share of Organised retail. Opening up FDI will not only be benificial for customers; it will also change the Quailty level for Customers.
It will aslo be good for Price correction; which is being artificially inflated.
Posted by Manish Bhatia,Category Head(Apparels- North) at Big Bazaar(Pantaloon Retail)|08 Jul, 2010
- FDI IS GOOD FOR ANY COUNTRY.BUT THEY COME WITH THE TECHNOLOGY MIGHT CAUSE OF UNEMPOYEMENT IN INDIA.
Posted by ANKUR | 08 Jul, 2010
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