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Retail – FDI

December 13, 2011

There was a huge hue & cry on this topic, some days back. Just thought through what are the advantages and disadvantages based on my limited thinking power and following are some points which came to my mind.

Advantages

  1. Consumer will be benefitted as there will be a price war
  2. Lot of people will move to the Organized sector
  3. Real Estate cost will go north (Double-sided Sword)
  4. Lot of new goods
  5. Agri sector will get organized

Disadvantages

  1. What will happen to our local farmers? – The Retailer would source from other country if the price is cheap. For example, Sugar prices would be cheaper in other countries even after you do an import, if the volume is high
  2. Lot of Junk items will be pushed-in, even if there is no need
  3. Consumerism
  4. Profits will be pushed back to the Retailer’s parent company in different continent
  5. The middle men activities on purchasing farm goods will go for a toss (Sometimes, it is beneficial. The reason for putting this in disadvantage list is, the whole set of people might loose their job)
  6. No more Supermarkets, only Hypermarkets

I would see, if there is some strong regulation on “re-invest” considerable share of profits in India and favoring the inland sourcing would give good amount of benefits to the Farmers and others.

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