FDI IN RETAIL - SUICIDAL FOR INDIA?

The Government of India has recently come out with a discussion paper proposing to open multi-brand retail to foreigners. FDI in retail is an important area having long term ramification on business activities in the country and therefore requires a serious discussion and analysis of its impact on consumers, growers, manufacturers, traders and distributors employment. The very first point which we must keep in mind that effort should be made to attract FDI in those areas where either sophisticated technologies are involved or funding requirements are of larger scales.

• India does not need investment in the retail sector but actually needs the same in infrastructure sector like power, roads, cold storage's. It has been noticed that despite of completely open policy, major investments in aforesaid sectors have come only from Indian business houses and there is hardly any presence of foreign investors.
• The retail or even the organized retail do not need any innovative technology and the latest modern systems and processes are very well-known to India and have rather been already implemented by large number of Indian business houses, then why foreigners are needed in this area.
• This will severely impact farmers and unorganized producers including small and medium enterprises as the mighty businesses in retail sector coming from developed world will further oppress the unorganized sector as has been our experience with East India Company.
• Another very important reason as to why FDI in retail should not be allowed is the fact that at present small retail stores, fruit and vegetable vendors, rehdi-walas and patri-walas as well as all other small businesses are providing self employment to about 200 million people. Any move to allow FDI in retail would seriously impair employment of such persons which cannot be in the interest of our nation.
• The organized retail marketing gimmicks and threat of misusing of muscle power and size would necessitate a regulator for the retail sector.
• The proposed discussion paper is actually a conspiracy against the common man in India as a whole and it seems the government is bowing down to the lobby of powerful business houses from foreign countries as well as from within India.
• India is going to become a developed country very soon and the economic prosperity of India will lure the foreigners to make quick money and it is a challenge to the UPA government to show to the whole world that it is a government of the Indians, by the Indians and for the Indians and no foreign interest can impact India's interest. There would be no value addition to the GDP of the nation through FDI in retail rather it would result in major outflow of resources in the shape of imports of finished goods and remittance of profits-royalties for grants.
• The Foreign Direct Investment in Defence Sector as well as in Telecom Sector need necessary monitoring and surveillance.
• Even indirect investment through an Indian company where 49% or less ownership is with foreigners is very dangerous if their downstream investment is to be treated as Indian investment. The side letters, memorandum of understanding and various unofficial agreements written or oral, formally or informally would defeat the very purpose of restricting foreign investments in various areas for security reason and for the reasons that we as a country do not need capital or technology or investment in areas which are very lucrative and where we would like Indians and only Indians to make money.
• Let us work together and oppose FDI in retail which if permitted would be suicidal to the economic growth of the nation in real terms and only help in facilitating global monopolies.