Is Foreign Direct Investment (FDI) in retail sector good for India?

Hello friends.

In my point of view, FDI is a good concept.

As it will directly increase the competition in the market and Indian companies will also increase the quality of their products. It will give more variety to the customers. Also, it will increase the employment in that sector and foreign companies will pay taxes which will enhance our Indian economy.

Hello everyone. It is good for us and our country because in FDI lots of opportunity for a job. Many Indian are seated unemploye than slowly remove unemployee and growing economy in India.

Hi.

I think there is pros and cons for every decision that is taken. One way customer and the government would definitely be benefitted by its arrival but on the other hand, it would be an obstacle for the young generation who wants to become entrepreneurs of their own as building empires like these large giants will require years of hard work and huge manpower support.

FDI is always welcomed in a Capital deficient Country like India but as far as FDI in retail sector is concerned, there is a lot discussion for and against the motion. Let's have a little look about that;

Arguments by those who favours it -.

1. Allowing FDI in retail sector will create millions of employment as some Giant MNCs like Walmart and Tesco will come and open their Malls and they will need man-force to operate it.

2. Customers will be able to find almost all their required items under one ceiling. They don't need to go from one place to another. It will save their time and efforts and at the same time will decrease fuel consumption as well as traffic congestion and help improve the environment (Pollution). I think this is more important for us at present.

3. Land in the centre of the city is very expensive so big MNCs may establish their building a little far from the centre (Must be connected with proper transportation). Thus, a lot of traffic will divert from centre to outside.

4. India will get a huge investment which will not only generate employment but revenue as GST and other taxes.

5. The competition will increase and thus customers will get better services. Customers will get products on competitive prices.

6. MNCs will buy retail items from India and thus can boost our domestic industry and generate employments indirectly. If they require, they can buy vegetables (to sell) from the farmer directly- this will help farmers get more prices for their products. Thus, help to double farmers income.

Arguments against it;

1. It will directly impact the employment in retail shops. The shops whose income will get down and not be able to pay even rent of shop building, they will cut man-power or it may be possible that they stop their shop.

2. There are more than 650 districts and around 4100 cities (administrative units) in our country. Suppose at least one such a big Mall is opened in each of cities give job to 50 people (the number can vary- it just an example), then 4100 Mall will give employment (Direct jobs) to 0. 2 million people almost. On the contrary, In our 13-14 million retail outlets (Wikipedia) suppose each gives the average job to 5 people (as there are some little big outlets and some small outlets) , then this sector may give a job to 65 to 75 million people (direct jobs). So the point is, FDI in retail sector may impact the livelihood of these 75 million people (not necessarily all).

3. A mall consumes a lot of electricity. It will increase the demand of electricity. To fulfil their requirement, we need to increase production which is still based on coal-based thermal power-plants (unhealthy for our environment). Thus will increase pollution (water, Air).

4. Big malls will impact competition environment in future. Some big malls can keep their prices less and get their rivals to throw out of the market and then can increase it (price). In absence of competitor, they can charge more prices on products (of course not more than MRP).

5. They can import all their needed retail products from abroad and thus, can destroy our domestic industry. It will result in more unemployment. (Govt. Can put a condition to buy at least some portion of their products from India).

Suggestions-.

1. We should allow FDI in the retail sector but there should be some limitations on it. Like as an experiment, we should allow some MNCs to open their mall in some districts in a state or in any Union Territory (no opposition from states in UTs) and then observe and examine how these MNCs impacting the retail market (retail shops) there. According to this experience, the Government should take further steps whether to allow it in the entire country or not.

2. No doubt, it will create employment but at the same time, it can generate unemployment on other places. So We have to deeply consider its pros and cons and then take any step.

FDI in sectors such as an automobile, education, manufacturing is greatly beneficial for India because it leads to investment not only in terms of money but also in terms of technology. Take for e. G. The partnership between Maruti and Suzuki, Hero and Honda, Mahindra and Renault. All this has led to the creation of powerful brands that produce vehicles of high standards and efficient manufacturing systems from Japan and other European countries. Maruti Suzuki is the largest car seller, while Hero and Mahindra have established themselves as strong Indian brands. Similarly, the investment and signing of MOUs have led to the establishment of institutes like IITs and IIMs which are world-class colleges producing world-class engineers and managers. Similarly, investment of technology or money in manufacturing industry strengthens them and enables them to compete with the foreign market.

However, allowing FDI in retail will be a huge mistake because retail industries or commerce shops are too simple to operate and doesn't need huge technological or economic investment. This is the reason why we can see so many Indian shops and malls operating in various places of India. Also the Indian IT industry is strong enough to help management of shops or malls easier by state of art software and computer systems. By allowing FDI in retail we increase unemployability of people because small shop owners will find it tough to compete with large retail giants and will lead to the closure and firing of employees. Also the companies investing here for retail are most likely to send the profit to their home countries. There is a benefit for farmers if the retail industries can give farmers a better price for the produce but even this is less likely and might lead to exploitation of farmers.

Therefore we can conclude that FDI in industries requiring technical know-how is a good option but FDI in sectors such as retail has huge drawbacks and should be implemented with due caution.

Hello everyone,

In my opinion, FDI should be increased in retail sectors in India as it will surely lead to the development of some new distribution channels which will, in turn, will benefit the customers only.

Secondly, due to the demonetization effect as well as GST introduction our economy is facing a huge problem in retail sectors as many people have even shut down the shops FDI will work as a motivation for them.

And hence better condition than now.

Also more the FDI more will be innovation in the retail sector which will cut down the unnecessary cost in distribution so no unnecessary addition to the cost of the product.

Yes, I think FDI is good because as we know that Indian economy growing so fast it's the horizon of new sunrise nowadays but still we are in fiscal deficit FDI is the medium to fulfil this deficit. The retail sector is on fire E-commerce company increases so fast it needs an investment of money And FDI is a good option. Of course, FDI creates unemployment in our country so 100% FDI is not permissible at all. Small industries totally destroy by this big company which leads to monopoly in the field of retail business even though the competetion between the native company and foreign companies are very high this leads to a production of great quality product and goods it's the best way to improve the quality of goods and services because a healthy retail sector is alive only if the opposition has a great deal of benchmarking. Thanks.

Yes it is essentially required for a developing country like INDIA. To start with, I want to comprehend the fact that we grow as a person by learning new things but in a disciplined manner. In the process of learning new things, we should not deviate from the primary objective of our life. A similar rule can be applied for the introduction of FDI (foreign direct investment).

Foreign direct investment can be made through single retail or multi retail stores. The government has allowed 100% ownership stake for single brand retail foreign direct investment and upto 51% ownership stake for multi brand retailers. And in addition to that, a minimum Rs 500 crores investment is required for investing in foreign nationals on multi-brand retail outlets.

It creates employment opportunities for many and is advantageous for the growth of logistics sectar as well. Apart from this, our farmers can also benefit from the advent of FDI in India as it creates greater transparency and they can get direct payment from those foreign players. It creates efficiency in the organised as well as unorganised sectar of the country. It prevents wastage of supply of perishable food items as they invest heavily in the construction of warehouses and cold storage facilities. It creates a strong infrastructural base for the country due to heavy capital inflow.

Disadvantages are very few though if we consider careful examination of the relevant facts and information. It definitely shifts a major chunk of our revenues to foreign investors. Plays a part in reducing entrepreneurial activities. Loss of livelihood of small retail owners. And last but not the least it is still hard to forget about the harm caused by east India company when they entered INDIA for exploring trade opportunities in the country and ended up changing the fate of the entire country, But exploring international opportunities isn't a bad idea when we want to grow as a country and improve the standard of living of its citizens.

Every coin has 2 sides. So if we talk from the customer's point of view, FDI in the retail sector will be beneficial as we will have varieties of products with good quality.

And Talking from local seller's point of view, FDI will be a hindrance to our business as there will be stiff competition from foreign companies which can lead to falling in revenue for our business.

And lastly, talking about the impact on job opportunities in India due to FDI, so at present India is doing pretty well in terms of maintaining relations with foreign countries, then be it importing electronic goods from China, importing crude oil from Saudi Arabia etc but the unemployment rate in India still remains unaffected at 5.7 and now it has been found that in 2018 it will increase to 5.80.

So, According to me, FDI in the retail sector should be prepared less, as it will hamper one of the initiatives taken by Prime Minister "Make In India". In the case of FDI, mostly foreign companies will prefer to employ their own people and make products in their countries and selling it to Indians earning huge amounts of profit.

Hello everyone.

I am Akash.

I believe large scale FDI invasion is bad for India. India's market is one of the top 5 markets in the world, in terms of consumers and retailing opportunities. There are a plethora of negative impacts of letting FDI to the Indian retail sector, but I would like to mention only three of them:-.

1) India local manufactures and businesses won't be able to compete with these sophisticated MNCs. Ultimately it will lead to the monopoly of these MNCs over the retail sector.

2) FDIs are foreign investments and by giving them liberty over our retail sector, we are increasing GDP of some other countries, not ours. It drains away from our economy.

3) The unorganised retail sector like kirana shops, pan shops, etc gives job opportunities to a lot of semi-skilled and unskilled people. While they might lose their jobs if FDI comes in the retail sector.

So, I conclude complete liberty over the retail sector is not good for India. The government must regulate FDIs. I appreciate Government step to be " VOCAL FOR LOCAL " to make India self-reliant or "atmanirbhar". Let the local manufactures and MSMEs uplift their business and take India to new high.