Will FDI in retail be against the interests of small retailers?


Samir Sachdeva | July 7, 2010

Department of industrial policy & promotion has released a discussion paper on FDI in retail sector. The discussion paper has sought opinion on allowing retail chains with foreign capital to open stores in select cities.

People against the move have raised issues that it will adversely affect the fortunes of over one crore small retailers in the country and force them to shut shop.  However, the experience with multi brand retail outlets like Reliance, Spencer, Big Apple etc opened by the Indian companies has shown that these companies have infact helped the smaller retailers. On one hand it has helped the smaller retailers to improve their services and on other have given huge employment in the retail sector to the youth. The entry of foreign retail stores like Walmart, Carrefour, and Woolworths will further increase employment opportunities for Indian youth.

The retail revolution has also helped the Indian consumer who now has multiple options available to them and better delivery models.

The participation of foreign players in the back-end infrastructure, processing of agri products and logistics will be further helpful to Indian farmers who will get better price for their crop. The investment will help to bridge the huge gap between the farm prices and consumer prices in the country. The better logistics management will help in cutting down the crop loss in storage and transportation.

But will the entry of such stores be against the interests of small retailers?




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