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

Hello everyone.

As we all, know India started to liberalize its economy in 1991 so as to globalize Indian economy. Till now FDI has changed the way buisnees are run from pre L.P.G reform era. Regarding FDI in retail is concerned goverment has allowed 100% in single brand with some restrictions regarding local sourcing and 49% in multi brand retail sector. Retail sector in India is an unorganised sector with 90% or more business done by local shop owners such as kiryana shops , departmental store owners.

Benefit of FDI in retail sector could be:
1. Benefit of scales which further leads to reduction in cost and same product available at lower cost.
2. Improvement in infrastruture such as cold storage which in result reduces wastage from farm.
3. More tax compliance as organiszed player enter the market.
4. M.N.C which bring in FDI also integarate Indian economy with rest of the world which allows our product avilable in other country and vv.
As more FDI is coming in India we are moving towards organized retail market with players such as walmart, reliace etc

Hello, everyone.

All of you said very well.

I respect all your opinion.

But according to my point of FDI in India is good. Because they invest much-needed money it leads the nation economically strong as the Europian countries. India is also suffered from unemployment problem FDI creates job opportunities for the nation. FDI makes the competition in the market increases because of everyone like become no 1 that leads the Indians also put more efforts to produce the quality of the product. This competition in the people will get the quality of product with cheaper rate. We also get a more tax from FDI that leads economically strong. Govt make strict rules it's definitely more helpful.

Given the topic to discuss on FDI, the first point I would throw light upon is international relationships. India has a long history of foreign investments dating back to the establishment of East India Company in Kolkata. After that the tie-ups of MNC's with Indian workforce to set up a vast chain of foreign companies in the Indian subcontinent. All this have time and again proved how foreign trades, investments, and establishments in India has always catalyzed Indian workforce giving rise to innumerable employment opportunities. Furthermore, cash flow through foreign investment strengthens the Indian economy, boosting the India economic framework. Foreign investments strengthen international relationships which results in international tie-ups, MOU's between these countries. Recently, in the Ahmedabad-Mumbai Bullet Train project, Japan has funded 88000crore. These are direct results of FDI channelizing through various sectors since ages in India. Funneling down to impact on the retail sector, FDI however, has some negative effects on the industries with a small turnover in India and indigenous production items. The surplus inflow of foreign goods does impact retail industry resulting in poor performance of indigenous goods. Hence FDI though beneficial to Indian economy in lot many ways should be strategically implemented in India keeping in mind its impact on every Indian industry.

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.

Hi, everyone. In the presence of digital role model of our country PM Narendra Modi, we should focus on made in India, not made for India. One thing we need to understand that until and unless we do not fully focus on self-dependent. We can't able to make our country digital India.

Now coming to the point FDI yes we all knew that it will lead to global integration, it will generate employment. But one thing we need to understand that all these things will not allow us to become a developed country. Why we are not thinking of setting up our huge company that will generate employment and later we will enlarge these to country like US, CHINA, JAPAN.

Hi guys.

Every coin has two sides. From my point of view its has merits & demerits also. But FDI will move towards more merits rather than demerits. Because of FDI we get more jobs, new technologies, growth, relation with other countries. FDI may affect slightly in the retail sector but not that much of influence. As we know in India we are suffering from unemployment. So FDI will give the solution to this problem somehow.

Before starting, first we need to understand what do we mean by the term FDI. FDI i.e., foreign direct investment is the investment by any foreign country in home country here India. This FDI can be fully owned by foreign player who wants to start business in India. Also, it can come under joint partnership with any private player of that country.

Now coming to the pros that why FDI in retail sector is good for country India. Firstly it enhances competition in the market which lessens the price of the goods, that is the consumer starts getting best quality at cheaper rate. Secondly, consumer gets lots of option to choose from that suits his/her budget. Thirdly, by bringing in foreign entity, it leads to the regional development of the country, thus leading to more employment opportunity for the people and also improving quality of life of the people.

Now, looking at cons, that why FDI is not good. As we can see our markets are already filled with Chinese products which are far cheaper than the Indian goods, and thus the price point at which these Chinese products are made has no match with the Indian goods. Thus, this has resulted in the shutting down of lots and lots of Indian companies due to failure. So, in my opinion, there should be FDI, but also there should be check in the products so that our own companies do not collapse due to foreign goods at cheaper rates.

As far as I consider, FDI is good for any country because it provides the opportunity to familiar with various kind of technology of world.

Yes, it causes many small businessmen, retailer etc would face many difficulties in short span, but beyond that the bright future is waiting for every people of India. It will help in increase employment, foreign trade, growth rate of economy, GDP and also will help to prevent inflation.

Firstly, it's important to understand what does FDI actually means. It means that a company from foreign country invests in one country to set up a buisness which would be helpful for them and for the country tuey investing too. Here, Retail sector is the part of country economy, a kind of buisness which supplies goods through store, internet etc. To buisness in our country, FDI was banned till 2011 then the government allowed the foreign investors. With FDI, our country's economy would develop which is very much necessary for a developing country. It also provides employment to youths in our country and somewhat of unemployment isssue would be solved.

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.