24-09-2012, 03:33 PM
THE RETAIL SECTOR
FOREIGN DIRECT INVESTMENT.pptx (Size: 957.75 KB / Downloads: 23)
What is Retail ?
The High Court of Delhi has defined Retail
as a sale for final consumption i.e. a sale
to the ultimate consumer..
Why Global Retailers Look Up to India?
Incentives attract FDI.
Market size and potential are sufficient inducers.
Tax breaks, import duty exemptions, land and power subsidies, and other enticements.
Problem in Raising Funds
Banks are reluctant to finance retailers because of falling demand of organized retailers in India as it has witnessed failure of many stores like Spencer's, Subhiksha, etc.
Benefits Envisaged To Agriculture Through The Opening Of FDI
Investment into warehouse and cold storage chain will result in significant efficiency on supply chain.
Farmers benefited through direct marketing and contract farming programme.
Improves farm production through modern techniques.
Government’s perspective
Huge investment by big global players in this sector will see a rise in employment
Help farmers secure profit by eliminating exploitative middlemen
Policy mandates a minimum investment of $100 million of which half will go to mend back-end infrastructure
Sourcing of a minimum of 30% from MSME’s is mandatory
Impressive growth in China in retail industry after it approved 100% FDI
Opposition’s arguments
Small-scale retailers will be wiped-out
Global retail giants may resort to predatory pricing to create monopoly/oligopoly
Fragmented markets give larger options to consumers
Comparison between India and China is misplaced as the latter is a manufacturing economy and one of the biggest supplier to the Walmart so it can’t say no to it.