Fdi in Indian Retail Sector Analysis of Competition in Agri-Food Sector

Sample this: A ten-year-old (Let us call him Raju!) was asked by his mother to get half a kg sugar and a packet of milk from the nearby grocery shop. Raju goes to the shop and for some reason, that day the prices of the regular milk packet have gone up by a few rupees. Raju was given the exact amount for the things that were to be bought. The grocery shop owner (let’s name him Mr. Lal) is quite known to Raju’s family. He tells the little boy to pay the remaining amount later, and hence Raju gets what his mother had asked for and gets back home. If you imagine a similar situation where Raju is sent to a nearby Super Shoppe (say, a Reliance fresh), I don’t think I need to narrate you what is likely to happen at the end of the story!

Change

comes

with

its

set

of

inevitable

consequences. Speaking of which all the hullabaloo that has come with the central government’s decision to allow Foreign Direct Investment in retail, whether or not the kirana shops will be shut down because of the entry of international bigwigs like Walmart, has got several arguments to it. With liberalised trade policies being openly

practised in our country, FDI will undoubtedly have an effect on the established unorganized retail sector. To elucidate, if we consider the conditions on the basis of which FDI will be allowed to launch their firms, one can actually see that there is no such threat that the kirana shops will face. Foreign retailers will be allowed to set up only in cities with a population of more than 1 million and only in states that want them. The retailers must make a

minimum investment of $100 million and must source at least 30 percent of the goods from local, small industries. One should not forget that the small scale retail shops (mom-and-pop store as they are popularly called) that are spread across in almost every nook and cranny of every available neighbourhood, allow their consumers to be a part of their business, in a way that there is a...

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Impact of Globalization on Indian Economy

The novel Tale of Two Cities of Charles Dickens begins with a piquant description of the contradictions of the times: It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; we had everything before us, we had nothing before us

At the present, we can also say about the tale of two Indias: We have the best of times; we have the worst of times. There is sparkling prosperity, there is stinking poverty. We have dazzling five star hotels side by side with darkened ill-starred hovels. We have everything by globalization, we have nothing by globalization.

Though some economic reforms were introduced by the Rajiv Gandhi government (1985-89), it was the Narasimha Rao Government that gave a definite shape and start to the new economic reforms of globalization in India. Presenting the 1991-92 Budget, Finance Minister Manmohan Singh said: After four decades of planning for industrialization, we have now reached a stage where we should welcome, rather fear, foreign investment. Direct foreign investment would provide access to capital, technology and market.
In the Memorandum of Economic Policies dated August 27, 1991 to the IMF, the Finance Minister submitted in the concluding paragraph: The Government of India believes that the policies set forth in the Memorandum are adequate to achieve the objectives of the program, but will take any additional measures appropriate for this purpose. In addition, the Government will consult with the Fund on the adoption of any measures that may be appropriate in accordance with the policies of the Fund on such consultations.

The Government of India affirmed to implement the economic reforms in consultation with the international bank and in accordance of its policies. Successive coalition governments from 1996 to 2004, led by the Janata Dal and BJP, adopted faithfully the economic policy of liberalization. With Manmohan...

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