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.
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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.
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142 Responses to FDI in Retail in India is a Boon or Bane?
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FDI retail has boon to our country as it increase the economic growth of our country.And when country economic growth increase alternatly ourselfs growth also increases .It has also negative effect as the small retail shops are removes from streets an there jobs will be on the sake……..so govt should think of them……
thank you !!!
😀 😀
fdi should be done in controlled manner so new technologies provides better products.by fdi money which we get from foreign market is used to growth in our economy.through fdi our economy is increased and recruitment is also increased.through fdi farmer can deal directly with the company and can get more profit.product quality increases and customer has more option.it not only provides the benefits for educated people but laso for the farmer.
i would support the statement, that FDI should be bane in retail in India because due to these big marts established here…income of small shops will be harassed as more people will be attracted towards these marts as well our economy of country would be go down because from my point of view until and unless common man of country will develop country can not make progress.
And the most important thing is, as foreign people will enter they again make profits from here and take the economy of India outside as they did 50 years back.
foregin investment in retail should be in our country b’ecaus today we are seeing india is on the way of developing so in this way we have require some foreign investenment so that we can go on the way of progress & develop our technology so that we can find acheivements.Foreign investors will bring their products to upgrade the retail sector across the country.FDI in retail also bring down the food prices which is the major cause of inflation.one more important aspect of fdi in retail is that farmers would sell their produce directly to the investors and they also get better prices for their produce.It also generate employment opportunities.but another point of view it should not be in retail b’cos in india there many villages they make the product but they cant develope there product because of lacking of technology ,facility,& tools,& others things which are for development their product.so firstly we should do develop in or country & then we have to do foreign investment in retail.
I think FDI in retail sector is a boon for foreign industry as it will provide it high employees in retail sector.but indian market this is not welfare i believe in FDI is some profit and losses but goverment are bill passes through it some urban areas and big cities like this trent,walmart,pantaloon retail companies.but i think indian market are not growth in retail sector but i will take some framing that a kind of sector but i think china may be losses are walmart i think 10 years losses in china. but i think some profit and benefit and through out it some passes above FDI are right but i think some cases are right for decision and it will take it decision for indian goverment.
From my opinion FDi is boon for our country economy as-
> it is increasing job oppurtunities which is very beneficial for our huge population
>Gdp will get improve
>very beneficial for agriculture field i.e..for farmers
>we can get commodities on cheaper price
So in all aspects it is good for the economy.
So why don’t we allow it and take denifit of it???
Hello friends,
FDI has both positive and negative aspects.
Positive aspect of FDI is that it will increase the revenue of government, farmers will get more profit than before because companies will buy foods directly from farmers by paying them more money as they normally get and one more advantage is that the chain of supplying will get short.
But the negative aspects are much severe than positive aspects. The middleman who are running shops will suffer from this because after this most of the people will prefer to buy from the malls. And the country growth is increased mot only by increasing the revenue of country but by individual growth of the country.
If FDI comes than most of the people wil get out of job and this will also increase the gap between poor and rich people.
Thus FDI should not be bring in India.
Thank you.
i think foreign direct investment in retail sector is a bane for the economic growth of the country.we all are living in a developing country so why we need a FDI.As we all know that the most of the economy of India is depend on agriculture if FDI is came then it will be harming for retail sector.or directly it is harm the growth of the country.in 1947 the people are not required FDI to develop the country so why at this time we need FDI.
See every change brings with it some advantages and some disadvantages. Change is the nature of the world. FDI is new in our country. It has also some drawbacks.
First i would like to tell about merits of FDI. In our country the main problem is unemployment and through FDI, there will be a great job opportunity. And foreign companies will pay a high amount of tax to our government so we can improve our economic power.
But when foreign companies do start their business, then small retailer will be unemployee and FDI will dominant in our country. our Agriculture will be also in loss.
so basically one side FDI will give jobs and other side it will snatch jobs from small retailers and farmers.
nikhil sant
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comment — FDI IN RETAIL IS JUST LIKE SCIENCE WHICH GOOD AND BAD BOTH, BECAUSE WHEN FDI COMES IN INDIA THEN IT BROUGHT DIRECTLY FROM THE FARMER AND SELL IN MARKET. SO THIS THING IS GOOD, BUT PROBLEM IS THAT WHEN THE QUALITY OF FARMER COMPONENT IS SO GOOD THEN THE PRICE OF THE VEGETABLE, RICE , WHEAT Etc. IS DECREASE. QUALITY MEANS SHAPE AND SIZE OF VEGETABLE SUCH LIKE TOMATO, POTATO, NOT IN EQUAL SHAPE AND GOOD/PROPER SIZE WHICH IS DANGEROUS FOR FARMER. SO FDI IS NOT GOOD 100% THERE IS DEMERITS ALSO.THAT IT HARM OUR LOCAL SHOPKEPER ..MOST OF THE PEOPLE CAN TAKE THINGS FROM FDI MARKET …SO OUR LOCAL SHOPKEEPER CAN REUIN THERE SHOPS .. ND IT WILL ALSO EFFECT THE INDIAN ECONOMY..
I personally like to say that FDI would be the bane for India because most of the Indian economy depends upon agriculture and if FDI camed than it will greatly hurt the retail sector.
Countries like china, brazil, bangladesh has successfully adopted FDI but on certain measures,but in India it will not be fair to pass the FDI bill ,earlier their was a 50% share of government if certain foreing company comes and invest in India but due to Passing of FDI they will be the 100% owner of the revenue and they may buy the products from outside india.
So, it is clearly against india and it is bane for indian economy too.
FDI in India at a limit is good because it provides jobs not only for educated person but also for poors and farmers.Along with because of competition prize of Indian company will decreases. And tax is also submitted by them so its also good for government economy.
Foreign Direct Investment was introduced quite early during the govt. of Mr. Narsimarao and Mr. Manmohan Singh as the Finance minister when a large amount of loan was approved by world bank to india. FDI basically comes from there,where the money was invested and slowly get a hike.
Yes,we need FDI because its basic priciple is to get employment. and to increase the per capita income.
also, we need to keep one thing in mind is whenever there is an investment in country,it is done in that perticular country’s currency and when it comes to india,whose currency value is lesser. we get a benefit in that transaction.
in my opinion FDI is bad for our developing country economy 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 privatised. And this privatisation can make a very serious effect on the country’s economy. 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 unorganised sector and leading to loss of livelihood the most favouring 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
in my opinion FDI is not good for our developing country as control of our country economy is greatly based on agriculture and retail field. approximately 70% of our economy is dependent on agriculture. if the % increment in FDI in retail sector then the investment in india’s retail market will be from foreign investors and the profit are also drained to investors and lot of money is out from country which is not good for our country .if the FDI is increased to 100% in retail then government will loss the control over this sector completely.Foreign company firstly says that they purchase the item from our country farmer but later they purchase from other country like china,so our farmer is not gain good cost and they become poor.example for this is cococola which firstly says that he purchase the tomato from punjab but later he says that panjab’s tomato is sweet so they can not use these but it is not a good excuse because they taste these tomato before. also indian retailer are unemploy as a lot of people are working in indian retail sector.
i just want to raise some point here…
1. the biggest retail company Wallmart has 2nd highest cases in various country against it after govt. of USA .
2. in USA its already declare that to come in India Wallmart has done the lobbing of more then 100 carors .
3. in India Bharti Wallmart buys the raw material on 10% and sale it with 90% profit .
4. east India company also came in India for business only but what happened we all know…
5. we already are living happily without FDI then what is the problem.
6. FDI is being recommended by the most corrupted govt. ever…
now make the choice yourself.
I think FDI is good. because by FDI many persons are recruit for jobs. Whenever this will come in india many big and costly company will reduce their prize due to sell their things. and one of the other goodness is they have to pay tax, so I think it’s good.
I agree with all those who say that FDI should be let in the country in a CONTROLLED manner.
Whereas the FDI policies com with advantages of introducing new technologies at cheaper prices, storage of food products so that they do not waste(since around 30 % of fruits and 5-8 % of grains produced in the country go waste,cheaper prices may lead to increase in consumption), a more organised form of selling products, introduction of foreign products in the country; the policies are still at low in some areas…, Yes , employment will actually decrease in bringing FDI in the country. A guy working at a counter in a shopping mall addreessess far more people than a guy working in a “Simple desi shop”.. Moreover, come to the point of livelihood of farmers, Walmart never guarantees how much it will pay while buying the food products from the farmers.. Buying a litre of organic milk from a big company costs 52 to a customers, while the company pays around Rs 18 only to the farmer..which does not seem to be just enough..
So in my opinion FDI should be brought, but the sector in which it is to be allowed should be thought well enough.
In my opinion FDI in retail is Boon for INDIA.
Positive point of View:
Foreign investors will bring their products to upgrade the retail sector across the country.FDI in retail also bring down the food prices which is the major cause of inflation.one more important aspect of fdi in retail is that farmers would sell their produce directly to the investors and they also get better prices for their produce.It also generate employment opportunities.
Govr. has made plans for placing the WALLMART factories in india. FDI ( foreign direct investment ) will create same conditions at the time of East india company.
Firstly they are showing the benifits for indian people but after some time they will take over the whole market of india.they are giving employment but the will give only 7000 /- to indian worker whereas he can get 12000/- as an indian worker.
The small kirana stores in india will get closed because FDI will open there store in every city where people will get Raashan in somewhat low price due to less distribution charges.
there are also some advantages of FDI.the Foreign currency will come in india,which will converted in Rupees.
So FDI have both positive and nagetive sides.this will depend upon that how much liberty will give indian govr. to FDI.
FDI is a new revolution in India. In 1991 the present chief minister Dr. manmohan present the policy to develop the financial position people say fdi is like east India company but that thinking is wrong relaince and many company in India so the don’t think like this . fdi reduce the market prize in every product . this is also give good prize to farmer so the farmer is in good financial position . people think that the middle man is finish in fdi. but that is not true many company already in india but middle man means shop keeper are not finish. this the new step to go forward .
You know what the there is no law to approve the FDI in India but instead of that government of India has approved the FDI in India. There are some advantages of that but more disadvantages if we take care of the Indian population because the wall marts will purchase the products directly from the farmers or the initial persons who developed that. Due to this many persons between this process have to become unemployed. We know that unemployment is still in a more percentage in India and this will also increase the unemployment in a great amount. So the future of India is so worth in this point of view.
Our government’s age is so worth if we take care of this topic. Government should have to increase some knowledge to take better decisions so India is growing in every field in a better way.
FDI in india should not be permeated in india because in india we invite FDI then lots of people will become usefulness and and they not have anykind of job.they will first provid cheaper cost of products and after sometime they will increase the products price so it should not be permeated in india.
FDI is good and bad for both manner.in a good way the the farmer can deal directly to the companies and get more benefit then the local distribute r .fdi is not good for common retailer because nobody purchase the common things from common retailer shop.fdi good for citizen who live in near the m atrocity because fdi wiil not gonna open the shop in village and mostly find in city.so there is bad for city retailer most of manner.if fdi work to purchase the things from the foreign and launched in our country. fdi now introduced in india and coming soon that rule apply and should be open.
FDI will be boon for the india in this foreign companies will directly invest in the indian business which will help the country in many ways like it will open many ways of the employement in the country which is the most burning problem of the country, will provide benefit to the farmers who can sell their crop directly to the company which will solve the intermediate problem so that farmers can get high price of their crops.
Small retailers can live with the large retailer company and can get benefit.