The Cabinet has approved 51 per cent FDI in multi-brand retail, a decision that will allow global mega chains like Wal-Mart, Tesco and Carrefour to open outlets in India.
The Cabinet also increased the foreign investment (FDI) ceiling to 100 per cent from the present 51 per cent in single-brand retail.
The following are the main issues raised by those in favour of foreign equity in multi-brand retailingand those opposed to it:
Those against:
- It will lead to closure of tens of thousands of mom-and-pop shops across the country and endanger livelihood of 40 million people
- It may bring down prices initially, but fuel inflation once multinational companies get a stronghold in the retail market
- Farmers may be given remunerative prices initially, but eventually they will be at the mercy of big retailers
- Small and medium enterprises will become victims of predatory pricing policies of multinational retailers
- It will disintegrate established supply chains by encouraging monopolies of global retailers
Those in favour:
- It will cut intermediaries between farmers and the retailers, thereby helping them get more money for their produce
- It will help in bringing down prices at retail level and calm inflation
- Big retail chains will invest in supply chains which will reduce wastage, estimated at 40 percent in the case of fruits and vegetables
- Small and medium enterprises will have a bigger market, along with better technology and branding
- It will bring much-needed foreign investment into the country, along with technology and global best-practices
- It will actually create employment than displace people engaged in small stores
- It will induce better competition in the market, thus benefiting both producers and consumers
The Cabinet also increased the foreign investment (FDI) ceiling to 100 per cent from the present 51 per cent in single-brand retail.
The following are the main issues raised by those in favour of foreign equity in multi-brand retailingand those opposed to it:
Those against:
- It will lead to closure of tens of thousands of mom-and-pop shops across the country and endanger livelihood of 40 million people
- It may bring down prices initially, but fuel inflation once multinational companies get a stronghold in the retail market
- Farmers may be given remunerative prices initially, but eventually they will be at the mercy of big retailers
- Small and medium enterprises will become victims of predatory pricing policies of multinational retailers
- It will disintegrate established supply chains by encouraging monopolies of global retailers
Those in favour:
- It will cut intermediaries between farmers and the retailers, thereby helping them get more money for their produce
- It will help in bringing down prices at retail level and calm inflation
- Big retail chains will invest in supply chains which will reduce wastage, estimated at 40 percent in the case of fruits and vegetables
- Small and medium enterprises will have a bigger market, along with better technology and branding
- It will bring much-needed foreign investment into the country, along with technology and global best-practices
- It will actually create employment than displace people engaged in small stores
- It will induce better competition in the market, thus benefiting both producers and consumers
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