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2/10/2016
FDI in Retail
Adverse Effects
Section-E Group-10
Jyotinmoy Roy
PGP/19/262
Vidish Verma
PGP/19/297
S Madhu
PGP/19/280
Jatin Bhoj
PGP/19/261
Introduction
The first set of reforms were introduced in the
year of 1991; its been 20 years still the
countrys socio-economic health is no good.
The announcement of FDI in multi brand retail
by the UPA government asks for serious
outlook. As mentioned by Suvrata Chowdhary
the debate so far is threefold:
(a) One section which is projecting huge rise of
investment in infrastructure and thereby
increment in the employment levels.
(b) The second group is skeptical about the
opening of markets for foreign retail giants like
Walmart, Carrefour, K-Mart etc. not because
they fear that it would affect the overall
development of the economy. Rather, this
group fears competition from the big foreign
companies which have deep pockets to
procure products from the world market. Thus,
it would affect their profits by a huge margin.
(c) The third group comprises of the
unorganized retail sector which fears its
elimination from the market in the long run.
Stakeholders
To understand the situation in detail and the
adverse effects of the policy lets look into the
vegetable retail sector:
The traditional flow chart of retail vegetable
produce consists of:
FarmersAgentsWholesalersTraditional
retailersCustomers
Suggestions
Need
to
slowdown
expansion
of
supermarkets
Need to limit the buying power of
supermarkets
Example of China took over 12 years to
liberalise its FDI regime and that too in
stages
Establishment of an independent authority
like a retail commission
Producer organisations and the NGOs
need to monitor and negotiate more
equitable contracts with the supermarkets
4. http://www.thehindubusinessline.com/opinion/how-fdi-in-retail-will-hurtfarmers/article2747451.ece