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The pros and cons of foreign equity in retailing
Thursday November 24, 2011 07:56:58 PM,
IANS
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Related Article |
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Ally Trinamool joins BJP, Left in opposing FDI in retail
Even as the
union cabinet meets Thursday to decide on allowing foreign direct
investment (FDI) in multi-brand retail, key opposition groupings -
the National Democratic Alliance (NDA) and the Left - have opposed
the move
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New Delhi:
The following are the main issues raised by those in favour of
foreign equity in multi-brand retailing and 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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Ally Trinamool joins BJP, Left in opposing FDI in retail
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