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What is Retail?
In 2004, The High Court of Delhi defined the term retail sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale). A sale to the ultimate consumer Retailing is the last link that connects the individual consumer with the manufacturing and distribution chain
WHAT IS FDI?
Movement of capital across national frontiers in a manner that grants the investor control over the acquired asset.
The Indian Retail Sector, currently the Fifth largest in the world, is poised for phenomenal growth in the coming years
Current Size & Future growth of Organized Retail in India
Impact on the consumer; low price and assured quality through supply chain efficiency Impact on producers, farmers; direct sourcing from SME s and farmers; providing
critical connect to market place Investments in the range of USD 30+ Billion expected by 2011 in Retail and Supply Chain Scale: Size of organized retail likely to touch USD 70 billion by 2011 Employment: Over 850K direct jobs to be created in Retail in the next 5 years.
Source: India retail report 2009 by Images Retail, CII BCG report on India s demographic dilemma Dec 08
Employ Benefits Greater ment to Govt. Exports Increasing Tax Paying Population Increased Tax Revenues Greater Sourcing From India
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Key Issues
Modern retail would displace a large number of jobs Global retail chains would adopt predatory pricing tactics to wipe out domestic competition (small retailers) Once global retail chains are established, they would be in a position to dictate prices for both buying wholesale, and selling retail products Retailing itself cannot boost GDP. The growth in manufacturing sector needs to be increased
Switzerland
88%
France
81%
UK
64%
Portugal
57%
If foreign retailers could capture 20 % of indian Retail Market , something about 8 Million jobs will be lost. Their level of efficiency mean they need less and less of people for each 1000 crores of Turnover - Business Line April 2005
FDI in Retail
Inflation = fn (...) of
Inflation
??
Fragmented and lengthy value chain Crude Price Excess Liquidity (Stimulus Package) No unload (hoarding by Govt. )
Wal-Mart in US
Every farmer has access to Computer High levels of Commodity Trading Condition of US farmers should be much prosperous. Isn t it .. ?????? US -- Direct Support to Farmers Why is US year after year giving indirect subsidies to farmers ? Acc to a UNCTAD Report if the green box subsidy is removed, the US Agriculture will collapse !!
Predatory Strategy
According to FICCI study, total turnover of the organized and unorganized retail trade in India is less than the turnover of Wal-mart. With its incredibly deep pockets major global retailing chains like Wal-Mart will be able to sustain losses in its Indian operations for many years till its immediate competition is wiped out.
Results
High Real Estate Prices Land Acquisition : Displacement of people Cannot provide employment to semi-literate people
Form majority of population
Pushing families below the poverty line The main purpose defeated if focus is on front line instead of back end
Conclusion
We should accept the FDI in retail, Because
1. Its wholesome package handled by the best economic brains in the country 2. Society will take care of itself if malls are harmful they can not do business here they will be thrown out. 3. We should not miss the bus like we have missed the bus of industrial revolution due to infighting of small kingdoms , zamindhars and Nawabs all over the India
Thank you!!!