FDI IN RETAIL

9/06/2013 1M.KIRAN KUMAR

What is FDI

FDI refers to capital inflows from abroad that

is invested in a foreign country.

• A company from one country making a physical

investment into building a factory in another

country

• FDI has come to play a major role in the

internationalization of business


ADVANTAGES OF FDI IN THE RETAIL SCECTOR IN INDIA

to consumer


Growth of economy: due to coming of

Foreign companies new infrastructure will

be build

The real estate sector will be grow

consequently banking sector

Job opportunities will be increase


Benefits to consumer

The consumer will get variety of product

At low price compared to market rates.

And will have more choice to get

International brands at one place


Disadvantages in FDI in retail

Might loose its market share

Many of the small business owners and

Workers from other functional areas may

May loss their jobs


Current Issues in FDI in Retail

Government has decided to allow 51% FDI in

Multi-brand retails.

Government has decided to allow 100% FDI

in Single-brand retails.


Present Condition:

Farmers get only 10 to 15% of the price

we pay.

3-4 middlemen in between farmers and

customers.

Huge post produce losses for farmers due

to inadequate facilities.

A poorly managed food supply

infrastructure.


What are the pre-conditions:

Minimum investment of $100 million.

50% of the investment is to be in backend

infrastructure development.

30% of all raw material has be procured from

India's small and medium industries.

Government has the first right to

procure material from the farmers.


Permission to set up malls only in cities with a

minimum population of 10 lakhs.

Only 53 cities qualify for FDI in multi-brand retail

out of nearly 8000 towns and cities.

Products should be sold under the same brand

internationally.

Foreign investor should be the owner of

the brand.



Who are in Against of FDI

Political Parties

like: BJP, SP, BSP, DMK, Trinamool Congress, CPI,CPM etc.

Unorganized Retail Sector

Social Icon


Government Arguments & Reason for

against the FDI

Retail FDI will bring Jobs in India.

Retail FDI will growth in Economy.

Retail FDI will help Farmers.

Retail FDI will help Local Industry.

Retail FDI will lead to removal of

middleman.


Retail FDI will bring Jobs in

India

Government Point: About 1.5 Million Jobs Will Be Created In The Front-end

alone In The Next 5 Years.

Employment opportunities in agro-processing, marketing, logistics management and front-end retail.

Opposition Point:

Indian Retail Sector is already employing 40 Million Indians.

Overall jobs created are going to be very less as compared to jobs which will be lost.


Retail FDI will growth in

Economy

Government Point:

New infrastructure will be build, thus real estate sector will

grow consequently banking sector.

Opposition Point:

FDI will drain out the country’s share of revenue to foreign

countries which may cause negative impact on India’s overall

economy.


Retail FDI will help Farmers

Government Point:

FDI removes the 3-4 middlemen in between farmers and

customers.

Growth of Agro-food processing Industry.

Opposition Point:

This will make our farmers produce for single buyers,

they will not have any other source to sell so they will have to

accept whatever prices they are giving.


Retail FDI will help Local

Industry.

Government Point:

30% of all raw material has be procured from India's small and

medium industries

Opposition Point:

Major buyers can source the product at cheaper rates from

outside India.

Some industries which are not able to compete shutting down

businesses and unemployment.


Multi-brand Retail is good or

Bad?


Effects on unorganized

players

Dislocation of millions from their occupation.

The domestic organized retail sector might not be competitive enough to tackle international players and might loose its market share


Employment in Retailing

Limited jobs in manufacturing.

Cannot provide employment to semi-literate people.

Many of the small business owners and workers from other functional areas may lose their jobs, as lots of people are into unorganized retail business such as small shops.


http://www.chakreview.com/Education/Top-10-highest-paying-jobs-in-India

Conclusion


QUESTIONS ?

SUGGESTIONS ?

DISCUSSION ?

I f this doesn’ t happen, I don’ t

survive.


Business

FDI IN RETAIL