Who is afraid of fdi in retail

It is argued that with their predatory pricing at both ends, they will capture the market only to squeeze the suppliers and consumers later. Lakhs of small shops will close down and millions of jobs will be lost. This is one reason why the government is proceeding so cautiously. The discussion paper is silent on some vital issues. One is the organisational form of rural producers as they interact with Big Retail.

Small farmers can undertake contract farming, but they have no bargaining power and will be at the mercy of their buyers. Small producers need to be organised into farmer companies or producer cooperatives that can deal with Big Retail from a much stronger position.

But who will organise them? Then again, without rural electricity and large scale new investment in water management, farmers cannot produce more, even with technical inputs from big retail. These concerns must be addressed while allowing FDI in retail.

When domestic majors were allowed to invest in retail, both supermarket chains and neighbourhood pop-and-mom stores coexisted. It's not going to be any different when FDI in retail is allowed. Who, after all, will give home delivery? The local kirana. Why would anyone shun them? If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices.

Mega retail chains need to keep price points low and attractive — that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn. The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak.

To begin with, it's very unlikely that global retail will ever become monopolies. Stores like Wal-Mart or Tesco are by definition few, on the outskirts of cities to keep real estate costs low , and can't intrude into the territory of local kiranas.

So, how will they gobble up the local guy? Honouring Exemplary Boards. Deep Dive Into Cryptocurrency. ET Markets Conclave — Cryptocurrency. Reshape Tomorrow Tomorrow is different. Let's reshape it today. Corning Gorilla Glass TougherTogether. ET India Inc. ET Engage. ET Secure IT. Auto Auto News. Auto Components. Products Durables. More Less. Journal of Applied Management and Investments. Saved in:.

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