FDI in indian retail Garment industry

By allowing FDI in multi-brand retail,it would beneIit garment makers as it

would lead to increased opportunities Ior them in the shape oI getting big size
orders Irom global brands like Wal-Mart and building exclusive partnerships
with international players. Even though the local garment brands who are also
into manuIacturing, are cautious regarding the opening oI large shops by global
retailers, as they believe it would harm their already well-established domestic
market.For example Lakra(Ludhiana based garment maker) supplies garments
to big brands like Reebok, Spencer and Benetton. Local players also see the
opportunity in having a joint venture with global retailers like Wal-Mart Ior
producing exclusively Ior them to cater to Indian market. They can now make
garments Ior their existing Indian customers but through their international
players .This would also help them in getting large orders which other vise was
very diIIicult Ior local garment players
Opening oI the global retailers will pose stiII competition to domestic brands
Duke Group is currently supplying ready made garments to Bharti-Wal-Mart
cash and carry store. Its sister company Venus Garments is also exporting
garments to Wal-Mart.
Ludhiana is known Ior ready-made garments brands like Duke, Montecarlo,
Priknit, Cotton County etc. There are units which are into manuIacturing as well
as retailing while there are manuIacturers, who supply garments to global and
local brands, but do not have any presence in retail.
A Iew textile units opined that besides large size orders, the presence oI global
retailers would bring in work eIIiciency and improve productivity oI local
manuIacturers.


Rationale behind Allowing FDI in Retail Sector
FDI will pose a stiII competition in the retail industry,.The policy oI 100 FDI
in single brand retail is beneIitial Ior both the global retailer and the
localpartner, Indian companies will have an access to global best management
practices, designs and technological knowhow & the global retailer would have
better understanding oI local market. With the introduction oI FDI in retail
trade, India will considerably Ilourish in terms oI quality standards and
consumer expectations, as it is certain to enhance quality standards and cost-
competitiveness oI Indian producers in all the segments. By allowing FDI in
retail sector it would not help in enhancing country`s GDP growth and overall
economic development. It would also help in integrating the Indian retail market
with that oI the global retail market which would inturn lead to better
employment opportunities and increased salaries Ior employees which is much
better than kirana and small stores. By Permitting FDI in multi brand retail, it
can bring about Supply Chain Improvement, increased investment in
Technology,increased Manpower and Skill development, Greater Sourcing
From India, Upgradation in Agriculture, EIIicient Small and Medium Scale
Industries.
Importance of FDI in retail
FDI in retail and the development oI larger stores and supermarkets have the
Iollowing advantages Irom the point oI view oI consumers and other stake
holders.
The supermarkets, can negotiate prices more aggressively with manuIacturers
and thus provide beneIit to consumers.
Setting oI higher quality standards
With the availability oI Iinance, the supermarkets can invest in much better
inIrastructure Iacilities like parking lots, coIIee shops, ATM machines, etc. All
this will make shopping a pleasant experience.
The supermarkets oIIer a wide range oI products and services, so the consumer
can enjoy single-point shopping.
The kirana shops in large parts oI the country will enjoy built-in protection Irom
supermarkets because the latter can only exist in large cities.