AAPNOMICS – Blocking of Retail FDI in India

8/13/2019 AAPNOMICS Blocking of Retail FDI in India

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2013 Deena Zaidi. All rights reserved.


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What is FDI?

Foreign Direct Investment(FDI) is when an individualor a company of another country makes a direct

investment into production/ business of another

country. For this, it either buys the target countrys

company or simply expands its existing business inthat country. FDI can also be done through mergers

and acquisitions by acquiring target companys

shares or through joint venture.



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We need FDI for economic growth of a country if that country lacks technicalknow-how and domestic capital . For a developing nation, FDI helps in gettingforeign capital, which is seen as a temporary measure during the developmentof capital markets. It boosts savings and brings additional employment to thecountry.

Why do we need FDI for economic

growth?



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FDIs were introduced in 1991under Dr. Manmohan Singhunder Foreign ExchangeManagement Act (FEMA)

Delhi NCR is the single largestretail market in this country

The predecessors of the AamAadmi Party, Delhi CM SheilaDikshit had allowed FDI retailstores to be opened in Delhi,not a single store has beenopened so far.

With the appointment of ArvindKejriwal, AAP blocked FDI retailoutlets in Delhi ,thus, fulfilling itselection manifesto .

FDI IN INDIA



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AAPnomicsa boon

or bane?

On 13thJanuary, 2014, the new

government of Aam Aadmi

Party wrote to the Departmentof Industrial Policy and

Promotion that no FDI retail

funded stores would be

allowed in New Delhi

They argue that blocking retailFDI will protect the interests of

farmers and retailers.



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Blocking FDI is not a goodidea!

It seems that AAP has no arguments as to why they haveblocked retail FDI in Delhi.

The decision has not gone down too well with oppositionparties and the industries.

Delhi anyways has not had any FDI retail outlets so far sincemost are located in Noida, Gurgaon and Faridabad.

By blocking Delhi as entry for FDI retail outlets, foreigncompanies will now look at other regions like Mumbai andBangalore for FDIs.



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AAP argues that it tends to protect the farmers and jobs of the peopleassociated with the industry. However, it is quite the contrary

By allowing FDI, AAP fails to understand that it will help farmers to bedirectly linked to the retailers. They will not be exploited by the complex

structure of middlemen which pays them much less than what thefarmers deserve.

The direct association of farmers with retailers will make deliveries timely,reduce the wastage of food and bring inflation down by cutting themiddlemensunrealistic margins.



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http://www.allbankingsolutions.com/Banking-Tutor/FDI-in-India.htm

http://www.firstpost.com/business/as-aap-blocks-retail-fdi-foreign-retailers-window-into-india-shrinks-further-1337569.html

http://www.ndtv.com/video/player/left-right-centre/aapnomics-making-industry-nervous/305336

http://economictimes.indiatimes.com/opinion/editorial/aap-should-not-ban-supermarket-fdi/articleshow/28810930.cms

http://timesofindia.indiatimes.com/business/india-business/Blocking-retail-FDI-to-rob-India-of-1-crore-jobs/articleshow/28807283.cms?


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AAPNOMICS – Blocking of Retail FDI in India