FDI in Retail in India is a Boon or Bane?
Last Updated: Sep 21, 2013
FDI in retail industry means that foreign companies in certain categories can sell products through their own retail shop in the country. At present, foreign direct investment (FDI) in pure retailing is not permitted under Indian law. Government of India has allowed FDI in retail of specific brand of products. As India is one of the developing countries, so FDI must be promoted but must be kept under control as it can affect the economy of the country.
FDI in INDIA
FDI in my opinion is bad for the country’s economy. As we are in the category of developing country and to develop properly we need to control the country’s economy very carefully. If the % in FDI in retail sector (multi-brand) is increased then the investment in India’s retail market will be from foreign investors and the profits are also drained to the investors. And moreover in INDIA, the retail sector mainly depends upon the agricultural sectors and the producer and if FDI is increased then it is going to affect the agricultural sector of the Country very badly and which will affect the country’s economy. And if the % of FDI is increased to 100% in retail (both single and multi-brand) sector then government will lose the control over this sector completely and then it cannot help in controlling this sector with its rule and regulations as the whole retail sector would be privatized. And this privatization can make a very serious effect on the country’s economy.
Top Foreign Investors
And one of the most disadvantage of FDI in retail sector is that as we know that the retail sector is one of the major employment provider and permitting FDI in this sector can displace the unorganized sector and leading to loss of livelihood the most favoring example is if wall mart entry in retail sector is allowed then it will kill the millions of local shops and jobs. The global retailers would exercise monopolistic power to raise prices and monopolistic power to reduce the prices received by the supplier. Hence both the consumer and supplier would lose while the profit margin in such retail change would go up. So from the above points i can say that FDI in retail sector is not good for India.
Advantages of FDI in Retail in India
- 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
Disadvantages of FDI in Retail in India
- Impact on Local Markets ( Kirana Shops)
- Limited Employment Generation
- Fear of Lowering Prices
- Negative Impact on Indian Economy
- Negative Impact on Indian Domestic Market
Please give your views in the comment section below. Any type of suggestion will be appreciated.
Related Posts:-
- Lok Pal Bill
- FDI retail Boon or bane
- Should we have Age Limit or Retirement for Politicians?
- Is Backwardness consequence of our Political System or its other way round ??
Tell us Your Queries, Suggestions and Feedback
142 Responses to FDI in Retail in India is a Boon or Bane?
« Rat Race to MBA is a Race to Big Money Should we have Age Limit or Retirement for Politicians? »
FDI in india is not suitable b,coz of india is developing country where most of people depand on agriculture so many cant effort this FDI. LATEST EXAMPLE Is WALMART which come in india indian retail company BHARTI
FDI in my opinion is bad for the country’s economy. As we are in the category of developing country and to develop properly we need to control the country’s economy very carefully
FDI WILL PUT A GOOD EFFECT ON INDIAN ECONOMY.NOW GOVERNMENT HAS ALLOWED 51% FDI IN RETAIL SECTOR.OUR GOVERNMENT HAS PROJECTING FOR FUTURE BY FDI FOR FARMERS.IT CREAT JOBS FOR THOSE FARMER WHO ARE COMMETTING SUICIDESFOR NOT HAVING RIGHT GAIN FORM THEIR EARNED CROPS.
how would u say that it reduces the profit of indian entrepreneur
FDI IN RETAIL IN NOT ONLY EFFECT BUT ALSO AFFECT OUR INDIAN ECONOMY. AFTER THE ARRIVAL OF MULTI NATIONAL COMPANIES IN INDIA, IT HAS EMPLOYEED MANY UNEMPLOYEED PEOPLE, & HELPED THEM FOR THEIR LIVELYWOOD. BUT IN REVERSE, IT IS THE CAUSE OF THE UNEMPLOYEMENT OF MANY DOMESTIC RETAILERS….. MANY DOMESTIC RETAILERS ARE VERY MUCH AFFECTED BY ARRIVAL OF MULTI-NATIONAL COMPANIES IN THE INDIAN MARKET..
AND ANOTHER THING IF WE ARE TALKING ABOUT THE PRODUCT THEN MOST OF THE RAW PRODUCTS ARE EXPORTED TO OTHER COUNTRIES FROM INDIA MAINLY…AND WE ARE THE FOOLS WE ARE GIVING PERMISSION TO TAKE THEM AWAY..WHY CANT WE MAKE USE OF IT SUITABLY ….SO AT LAST WE ARE IN LOSS BY TAKING D READYMADE PRODUCT FROM THEM
FDI retails is a boon because it helps commerce &economy of a country.he Retail sector of India is vast, and has huge potential for growth and development, as the majority of its constituents are un-organized. The retail sector of India handles about $250 billion every year, and is expected by veteran economists to reach to $660 billion by the year 2015. The business in the organized retail sector of India, is to grow most and faster at the rate of 15-20% every year, and can reach the level of $100 billion by the year 2015. Here, it is noteworthy that the retail sector of India contributes about 15% to the national GDP, and employs a massive workforce of it, after the agriculture sector. India’s growing economy with a rate of approximately 8% per year, makes its retail sector highly fertile and profitable to the foreign investors of all sectors of commerce and economy, of all over the world. Global Jurix, a full-fledged legal organization prominent worldwide, provides all-encompassing services and advice for most lucrative and secured fdi in indian retail sector.
FDI in Retail India
AT Kearney (a globally famous international management consultancy) recognized India as the second most alluring and thriving retail destination of the world, among other thirty growing and emerging markets. At present, other profitable retail destinations of the world are China and Dubai of Asia. Diverse foreign direct investment in indian retail is greatly cherished by most of the major and leading retailers of USA and European countries, including Walmart (USA), Tesco (UK), Metro (Germany), and Carrefour (France). Liberalization of trade policy and loosening of barriers and restrictions to the foreign investment in the retail sector of India, have collectively made the fdi in retail sector quite easy and smooth. Our services are easily and economically available for the following ways of fdi in indian retail.
FDI in retail is a boon. Bcz, it will put a good effect on Indian economy. Many unemployed persons get recruitment inthese sectors. The Foreign Developement Investment in retail sector will bring forth benefits in terms of advanced employment, organized retail stores, availability of quality products at a better and cheaper price. It enables a countrys product or service to enter into the global market. FDI enables transfer of skills and technology from overseas and develops the infrastructure of the domestic country.
@NIROJ PAHI…..HOW IT CAN BE BOON….IF THE PEOPLE OF INDIA CAN CHANGE THE ECONOMY STANDARD THEN WE HAVE NO NEED TO DO SO…NOW THE THING IS THAT WE HAVE TO WORK AND ADMIT FOR OUR RIGHT….
IT MUST NOT BE BANE BECAUSE IF IT WILL BE BANE THEN AS PER THE PRESENT SITUATION OF OUR COUNTRY THE REDULT OF BANE WILL MAINLY AFFECT THE FARMER SITE OF OUR COUNTRY WHICH WILL MAINLY PUT A WORST IMPACT TO US..
FDI has really changed the scenario for the job seekers but alongwith thatwe really need to find out a path for the uneducated fellow members too. due to poor government feedback n works lots of people remain uneducated n find quite hard to get a a working place.. so we really need to work on them too. 🙂
I think FDI is necessery in some field but not in evry where…
FDI in retail is good for some people which are educated and farmer gets good prices for his works
who can say that they are going to get benefits ……….can’t say until they suffer or get benefit but to get the result we have to wait long and there would be no time for change at that time
it is benifitial in some ways..though FDI in reretail is not all good for India
now the government has allowed 51% of FDI in retail sector, and the most critical moment was that the BSP leader who were opposing the motion voted in favor of it with an argument over days what made them to change their decision overnight , who were against the govt. became with them in just 10 to 12 hrs. of time. and many of them on that very final day of voting didn’t attend the parliament. but finally it was decided by the govt. that FDI in Multi- brand must be enhanced to 51% now this will be a great concern for the near future economic condition. it will be giving them a space of monopolistic marketing.
FDI is good to some extent as it increases the scope for new job oppertunities in india..
And i want to add to the above that it creates jobs to some extent but it will make the uneducated people difficult to earn their livelihood. so is it good to have 1 person with high salary or to have 5 person having average salary.
FDI is particularly BANE for India in the long run.Government is projecting it as a benefit to future but it is the strategy of these enterpreneurs to start with less prices first and when there is a monoply which usually exist after they rule over the market they suddenly increase prices and people are forced to buy from them……
i completely agree with bharati pandey, they usually show us the better face of coin but we must know that there’s another side which can be rather much worst. FDI % is increased to 100% then the company having FDI would make the market monopoly . for ex- the shoes that we buy generally (i.e. reebok or adidas) comes handy with starting range of rs-1099 onwards if FDI is increased for 100% in these multi-brand sector in long run they may increase the price to 2000 or even more but as a brand we have to buy them so FDI is BANE for our economy in long run.
mr sandeep verma how would u say that it reduces the profit of indian entrepreneur
dear chirayu baheti, i would like to give my opinion on this if you put some money in a business, then the profit generated is yours in the same way if money is invested by the outsiders then the profit will of course be drained out of the country and their investment in our country will be their assets which would be in their company name (i.e in their name) so in short if FDI is permitted at higher rates then it’s going to effect the country economy in greater way.
mr sandeep sharma how would u say that it reduces the profit of indian entrepreneur
dear Chiray Baheti, FDI has foreign investment as investment is from outsider so it drains the profit to them , so in short it reduces the money supply in India.
we can say FDI is good for some people and bad for some people…
FDI can control retail sector it is good for common people.In India we are having many number of small scale entrepreneurs they may face the problem due to this system.
(FDI) in pure retailing is not permitted under Indian law….. Government of India has allowed FDI in retail of specific brand of products. As India is one of the developing countries, so FDI must be promoted but must be kept under control as it can affect the economy of the country……
FDI in retail is a boon in Indian Economy. FDI offers great oppertunity to the people of India and increses the Indian economy. By FDI money which we get from foreign market is used to increase the global market. Prices of foreign trades are lesser as compared to present time. The quality things become cheaper in future if FDI retail in marlket comes. Wallmart which is an joint venture with Bharti increases the market. So it is a boon for Indian Market
yes FDI must be controlled in retail sector we have 49% FDI allowed but now government is seeking for 100% FDI in retail sector ? and now if it is approved by government then the situation of our economy will be very bad.As govt. couldn’t control the price rise then afterr allowing 100% FDI how will it control the sector as 100% rule will be of the investor and there would be no play field for Government.
It can be fruitful if controlled else not..and we have to make sure that we are trusting the right company to flourish in the country..and the brand like “Amul” which has been working so far should be allowed to sustain before other brands are encouraged to build their stocks in the country…..
miss fatima , yes FDI must be controlled in retail sector we have 49% FDI allowed but now government is seeking for 100% FDI in retail sector ? and now if it is approved by government then the situation of our economy will be very bad.As govt. couldn’t control the price rise then afterr allowing 100% FDI how will it control the sector as 100% rule will be of the investor and there would be no play field for Government.
fdi in retail is good for india,, it will create jobs not only for educated ones but also for those farmers who are committing suicides for not having right gain form their had earned crops
Fdi is not gud bcoz anything which crosses its limiting its bad
soat particular percentage fdi is gud but it crosses some percentage its not gud for india future