Why Indian Govt. is egar to support FDI in Retail ?

Why Indian Govt. is egar to support FDI in Retail ?

In the open economy system, under the disguise of global competition, it is felt that almost all trading activities are aimed at promoting MNCs and major Indian players in the field. There is a fear that the local but small organizations will become causality in this competitive war as they are subjected to an unfair trade war. The government of India is keen on permitting FDI in the retail industry and many foreign or Indian based foreign organizations may take part in these trading competitions that will kill the local trading community. The already existing super market culture has prevented the growth of small time retailers in urban, semi urban and rural areas. It is estimated that about 50 to 60 lakhs of such smaller retailing organizations will be hit by the mall culture. This will also cause an unemployment problem and give a violent blow to small-scale entrepreneurship, as the small traders should make a forced exit. Most of the Indian and foreign high class magazines highlight the dreamy wonders of super and hyper markets, whereas the basic question lies that what will be harvested through the principle of hyper marketing by the below poverty line people of India who make 30% of the total population. The hyper marketing system will also control advertising, retail selling, branding and ultimately the schedule of manufacturing industries. After some time the manufacturer will be at the mercy of the mall owners and their freedom to manufacture, fixation of price for their goods, bargaining power etc. will be curtailed.

Why Indian Govt. is shy on taking-up Swadeshi issue in country's interest ? Is it because it was once the burning issue of its famous Opposition party ?

Update:

@ India Inc. : Ok, even if we don't care about "KIRANA" store owners what about those poor "ADIVASI" vegitable sellers sit on the pavements/footpaths who mostly travel long journey on overloaded local trains only to sell veg to us in cities ?

Did Govt. planned anything for such poor people ? Because don't we want another episode of Sucides done by poor vegitable sellers after Farmers.

Try to analyse the pros & cons and don't just blindly support each & every move made by Govt. with silly reasons only because you voted them.

6 Answers

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  • 1 decade ago
    Favourite answer

    Sir I first thank you for raising a critical issue impacting the poor retail traders who are in massive number in the country.

    consequent to our signing the WTO agreement and implementing Economic Reforms (de facto rolling up the Democratic Socialism slogan and throwing open our economy for global play) by Dr Singh, sweeping changes have been made in policies, mainly in favour of the foreign MNCs. Though big changes for the better were talked about, through the Reforms, only a few (less than expected) rewards in the form of flow of new technologies, FDIs in various ventures etc were realized so far! Mainly the foreign investments are more here because our wages are cheap compared to their contries and so they get massive profits!

    The foreign investors have abundant support of their govts who cleverly lobby with our govt to obtain potential areas, for their traders, mainly profitable ventures, to earn massive profits. The idea to privatise even profitable public sector undertakings is a fall out of this.

    Now the govt is keen to permit their play in retail sector also, which would edge out large number of native, low investment retailers out of job, as they can not compete with the sharks who dazzle with their alluring ads, offer attractive services with elegant packings etc.

    But the products sold by MNC retail outlets are very costly, to cover their extravagant expenses on renting spacious shopping area in heart of towns, costly ads, hired staff, AC halls and computerised billing etc in addition to their own greedy profit margin! But even the middle class people swarm to these shops deserting the small domestic retailers around!

    This would tremendously affect the trade of these simple folk, posing loss of income, necessitating their abandonement of small business in a very short time. But our MPs being mostly crorepathis would not be able to think of masses. See the shameless way they asked for further hike of their remunerations and allowances, when common people are reeling under unprecedented price rises!

    But this economic invasion, could have extreme implications, including Maoist like revolts, from the large number of affected people, over time ! But our Govt seems determined to go ahead with its wrong policy!

  • Anonymous
    5 years ago

    Infinity has given a balanced answer and SUN is also partly correct. The FDI for single branded items may not do well but the multi branded items may do well, because of the choice. However, the majority of Indian consumers may not easily change the brand loyalty that easily and some areas may suffer. While the foreign FDI will bring in new capital inputs (which Indian business is not so forthcoming) and new business and commercial ideas, it is unavoidable that it may affect local medium size traders. For example, in Navi Mumbai, a leading departmental stores has already shut shop with the advent of a few malls around If the Govt.'s claim of new job opportunities for 4 million comes through, the FDI will be a blessing in disguise. The Govt. should also allow foreign infusion selectively so that existing industry does not suffer.

  • 1 decade ago

    For the simple reason that wherever FDI comes in competition and quality sets in and it improves our domestic services. Maruti and TATA are one of the most selling vehicles in spite of the market being flooded with foreign companies.

    The FDI in retail is opposed by the local 'kirana' so that they can continue taking the customers for a ride.

    India Inc.

  • 1 decade ago

    it is for interest of consumers. if we see the MRP in the Pocket and actual price is entirely very low.

    the traders are not shy even in the medicine. the expiry medicine and the duplicate medicine are very common in the market.In Tamil Nadu so many medical shop and bogus medical manufacturingg companies are closed by the government for theirr dangerous Businesss practise.

    trades are only for consumers i nterestt not for the businessmen interest. the people expect good bussiness practise in India.

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  • Anonymous
    1 decade ago

    UPA Govt. have just one important agenda is - to go against BJP's wish. So in that process its does just opposite of BJP even if it required to lick the b u m p s of America & European countries and welcoming their MNCs.

  • 1 decade ago

    Z

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