Four years and still we are waiting for what??
FDI in multi retail brand seems to be a good oppurtunity for the agriculture sector, logistics sector and retail sector. I see it as some kind of revolutionary measure as it is completely going to change the whole process of retail market. Boon for a lot and ban for a few(although will be compensated in a bit less for them too in other ways).
Firstly, farmers(perishable food producers) will be most benifited as they will be able to sell their products with good profit margins and will not have to indulge in one sided bargaining(as with the local stores or kirane walas), With better margin they will have better future opportunities.
The Second category who will gain will be government, hoarding and supply chain hurdles will be solved automatically. Demand will be met in ease with supply as lot of foreign investors will bring in new technologies to store and transport perishable food (Although it will be a challenge for them) which will reduce the waste and will in turn bring down the demand. Inflation will also see some downtrend as a result.
Thirdly, economy with such volume foreign investment will also see huge development in this sector and will also multiply with years to come. It will ease the pressure of food products from CPI at significant level.
Finally, Foreign investors will see increasing growth in what they invested and their returns in monetary terms will keep multiplying as and when they grip different states in the country. It will again entice foreign investors to invest in market as well as direct investment in this sector in India.
2 comments:
Agreed on all your points. But guess we have only looked at the positives haven't we? :)
Retail firms across the world are massive. If they resort to predatory pricing, they can break the backbone of the unorganized Indian retail.
Also the extent to FDI matters. But I think it will be a good move to start with at least 26% FDI. What say?
Good counter point but i think government will put regulations for discouraging such activities. Although not sure to what extent and to see that government can do as you rightly mentioned for 26% FDI.
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