Future Group to open 25-30 Big Bazaar outlets by June 2012 (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/future-group-to-open-25-30-big-bazaar-outlets-by-june-2012/articleshow/9137691.cms)

MUMBAI: The Kishore Biyani-promoted Future Group, which runs India's largest retail chain in both value and lifestyle formats, on Thursday said it plans to open 25-30 Big Bazaar outlets by June 2012, and will invest Rs 300-crore for the same.

"We are planning to add 25-30 stores on the Big Bazaar front. Our target for this year is 30 stores for Fashion at Big Bazaar and we already have 13 stores, so real estate provided we should be able to achieve our target," Future Value Retail Joint CEO (East & South) Sadashiv Nayak told PTI.

The Future group currently owns 152 Big Bazaar stores in the country. "We will be investing Rs 300 crore for Big Bazaar and for the stand-alone (Fashion) it should be another Rs 70-80 crore," he said on the sidelines of Amar Chitra Katha (ACK Media) scholarship event.

Indian retailers are worried over lack of talent and threat of poaching: Study (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/indian-retailers-are-worried-over-lack-of-talent-and-threat-of-poaching-study/articleshow/9212402.cms)

KOLKATA: The Indian organised retail sector is worried over the lack of talent, threat of poaching, unavailability of experienced manpower and stressful work environment, says a study undertaken jointly by Deloitte Touche Tohmatsu India and the Retailer's Association of India .

Although attraction and retention of talent continue to be concerns, Indian retailers have developed strategies to overcome these issues in critical work segments like merchandising and brand management. The study says retail companies should focus on developing a talent management strategy influencing business strategy.

In terms of compensation, operations scored highest in fixed pay component followed by business development, sales and merchandising. The annual increment the retailers doled out to their employees in 2010-11 was around 10%.

The study also highlighted that Indian retailers follow a similar variable pay policy for their corporate and frontline staff. While most retailers ensure that organization performance defines the payout, calculating individual performance at the store level is quite difficult. However, the retailers are in the process of developing a robust performance management system.

Most of the retailers are still following traditional organisational principles and rarely experimenting with newer practices like cross-functional teams or mobile workforce which can be rotated across functions.

Country's largest retailer Future Group's private brands top the booming modern retail industry (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/countrys-largest-retailer-future-groups-private-brands-top-the-booming-modern-retail-industry/articleshow/9230549.cms)

NEW DELHI: Retailers' own brands are making rapid gains across consumer product segments in the booming modern retail industry, weakening several established brands' power to negotiate lower trade margins.

Leading the charge is the country's largest retailer Future Group, whose private brands have been outselling some of the country's best-known brands in select categories across 200-plus Big Bazaar and Food Bazaar outlets.

Private brands already account for close to 7% of modern trade sales in India, compared to 1% in China, according to market researcher Nielsen's latest survey that covers over 50 countries.


"Unlike in the West, where retailers brands started decades later than national brands, in India, we are participating in new age categories, so we can be significant players in driving consumption," Chawla says.

"Modern trade is a catalyst and incubation ground for categories like corn flakes and hand washes, so we are placing big bets on these brands," he adds. Future Group recently extended its Sach brand to hand wash. Industry experts, meanwhile, point out private brands' share is miniscule in absolute numbers.

"Actually the base of private brands remains small, which is why their growth looks impressive," says retail industry veteran and consulting firm Wazir Advisors MD Harminder Sahni. Retailers sell private labels (or store brands) to consumer at prices 10-20% lower than national brands because retailers don't incur overheads like marketing and advertising costs.

Pricing depends on the category - in some low-involvement categories like toilet cleaners private brands are priced cheaper, but in others like hand washes they are costlier than established ones. In developed markets, there are many examples that reiterate the clout of retailers.

Attractive deals and promotions help big retailers grow (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/attractive-deals-and-promotions-help-big-retailers-grow/articleshow/9230591.cms)

NEW DELHI: Modern trade, or westernstyle shopping, has made its biggest stride yet in the Indian FMCG space with an increasing number of Indians now buying their noodles, household cleaners and detergents from big retailers who offer attractive deals and promotions.

One in every five consumers in Indian cities and towns buy most of their groceries from a modern retail store, says a new study by market researcher Nielsen.

Nielsen's Shopper Trends, a global consumer research conducted in over 50 countries to understand shopper attitudes and behaviour, shared exclusively with ET, says modern trade in India is recovering from the slump of a year ago and is growing faster than traditional trade.

Management consulting firm Boston Consulting Group Partner and Director Abheek Singhi attributes the growth in organised retail to four key reasons: higher number of store openings, consumers moving to premium categories, clearly differentiated products and consumer promotions and value offers. He says organised retail is growing 60-70% faster than the unorganised sector.

Future Group Chairman and MD Kishore Biyani and RPG Group-owned Spencer's Retail President Vineet Kapila say the share of modern trade is 25-30% in top cities. The clincher for modern trade, to a large extent, is deals as the Nielsen study shows that there is a significant jump in the number of buyers searching for promotions.

Nielsen attributes this to rising inflation and increased accessibility of the modern retail format.

Finally some good news on retail!:)

Consumers will soon have more options to choose from as the Committee of Secretaries (CoS) on Friday agreed to open up the retail sector. The CoS has recommended a 51 per cent foreign direct investment (FDI) in multi-brand retail formats.
This will open up doors for retail giants like Walmart, Carrefour and Metro AG who've been eyeing the Indian market for some time.
The panel has proposed a minimum investment of $100 million. The cabinet will now take a final decision.
The CoS also recommended that FDI should be allowed only 36 large cities which have population of over 1 million.
There was, however, no official confirmation on recommendations of the CoS.
The CoS meeting, attended by 10 secretaries, deliberated on the issue for nearly three hours. It is understood to have rejected a proposal that stores with FDI should be asked to sell at least 30 per cent of their goods to small retailers.
A few secretaries favoured opening the sector for FDI up to 49 per cent only, while the majority favoured 51 per cent.
The CoS recommendations came after about a year of the Department of Industrial Policy and Promotion (DIPP) floated the idea of opening the sector for FDI.
While the CoS has given its recommendations, the Union Cabinet would have to vet it before FDI could be allowed into the sector.
India has already allowed FDI of up to 51 per cent in the single brand retail and 100 per cent in cash and carry format of the business.
India's largest retailer Kishore Biyani has welcomed the move saying huge investment needed in the retail sector.

Source:http://ibnlive.in.com/news/road-cleared-for-51-pc-fdi-in-multibrand-retail/169544-7.html

Finally some good news on retail!:)



Source:http://ibnlive.in.com/news/road-cleared-for-51-pc-fdi-in-multibrand-retail/169544-7.html

36 large cities by population - as of now 10 of 35 Maharashtra districts come in the most populated.
:):):)

^^ Wait for the traders protest against them.Considering a giant like Walmart is coming in - I'm cringing at Medha Patkar and the likes to begin a massive crusade against their entry.


CAIT opposes FDI in retail; to stage protests across country on July 26

Opposing the recommendations of the Committee of Secretaries for allowing 51 per cent foreign direct investment (FDI) in multi-brand retail, the Confederation of All India Traders (CAIT) today said it will hold a protest at nearly 100 places across the country on July 26.

While strongly opposing the recommendations, the Confederation said it will adversely affect crores of small shopkeepers and in turn will also badly hit many more who are dependent upon retail trade for their livelihoood.

The CAIT has alleged that the recommendations in question are the result of deep rooted lobbying of global retailers and domestic corporate houses and therefore the recommendations are biased and one-sided.

"The recommendations have revealed the double standards policy of the Government," CAIT Secretary General Praveen Khandelwal said in a statement.

Mr Khandelwal said the Department of Industrial Policy and Promotion (DIPP) had released a discussion paper on the subject last year which received about 180 responses.

ADVERTISEMENT
Of which, about 120 responses strongly opposed the FDI in retail trade, while the rest of the responses which supported the issue were mainly of global retailers and other vested interest people.

"The majority view has been overlooked and as such it appears that the recommendations are doctored," he said.

The trade associations across the country will unitedly oppose the latest move, he added.

The CAIT delegation will soon meet prominent leaders of all national and regional political parties and Chief Ministers of all States, and will apprise them about the apprehensions, concerns and views of the trading community.

Source : Link (http://netindian.in/news/2011/07/23/00014415/cait-opposes-fdi-retail-stage-protests-across-country-july-26)

^
dumb logic from the traders


based on the same logic we should shun technology as well and live in the dark ages.


I am personally sick of the small shop baniya who has unethical practises. I hope they are smashed out of the market good.

^^ Well - I wouldn't want them booted out - they are after all relatively honest - hard working folk - but true - I feel they've been laid back in the absence of any world class competition and have let India retail slide to become nothing but series-of-small and decrepit-limited stocked goods shops that an average consumer has to crisscross many times to complete his or her shopping needs!!

Consumers in India don't access goods- the SHOPKEEPER access whatever limited stock his small shop offers and does a take it or leave it. The consumer then jumps from shop to shop - with varying prices - shady dealers - non-benchmarked goods whose quality is suspect!! All to do a simple task of shopping!!!

Compare this with a standardized discounted mega mart where you get everythign categorized, benchmarked directly sources from smaller producers/farmers/manufacturers with quality benchmarks fixing everything from corrupt middlemen-practises, raising farm income and delivering world class quality goods at cheaper prices to the consumers!!!

If competition whisks the kirana shops to pick up the gauntlet and start delivering like 21st century merchants - then its not only good for the consumer - it'll be good for them and most importantly- great for the country!!!

^^ Well - I wouldn't want them booted out - they are after all relatively honest - hard working folk - but true - I feel they've been laid back in the absence of any world class competition and have let India retail slide to become nothing but series-of-small and decrepit-limited stocked goods shops that an average consumer has to crisscross many times to complete his or her shopping needs!!

Consumers in India don't access goods- the SHOPKEEPER access whatever limited stock his small shop offers and does a take it or leave it. The consumer then jumps from shop to shop - with varying prices - shady dealers - non-benchmarked goods whose quality is suspect!! All to do a simple task of shopping!!!

Compare this with a standardized discounted mega mart where you get everythign categorized, benchmarked directly sources from smaller producers/farmers/manufacturers with quality benchmarks fixing everything from corrupt middlemen-practises, raising farm income and delivering world class quality goods at cheaper prices to the consumers!!!

If competition whisks the kirana shops to pick up the gauntlet and start delivering like 21st century merchants - then its not only good for the consumer - it'll be good for them and most importantly- great for the country!!!

Not to annoy but even Walmart has rotten vegetables but i support FDI in retail to get Supply Chain & Storage Facilities in India

^
difference is that with Walmart and many of these chains you can return items. I lived in london for a few months and was surprised to note that you could return things even after 28 days. Perishables ofcourse you can return quickly.


the baniya in India is just plain unethical.


Even the vegetable traders. So many times you buy 1kg of say tomatos and end up weighing it back home cause it feels light and turns out its only 500g cause the trader had been using shot scales. thats one of the big reasons why my mother shifted the purchase of vegetables from the baniya/street vendor to Big Bazzar. You know what you get. As i mentioned in another thread. These traders see you in good clothes they will jack prices up for no apparent reason cause supposedly you can afford to pay extra. We as a family are more than happy with Big Bazzar. Hope that the global biggies come and there will be more competition.


Cause frankly the Indian trader and corporates need competition to raise the bar for the benefit of consumers.




Its similar to how the meru cabs are driving out many of the taxis out of business. You know before hand exactly what your paying for. Not some dodgy meter tampered bozo.

I swear once i travled about 2 km but the meter read 3 km. He saw i had good clothes on so asked for the fare for 4km. I asked him to show me the card for rates as i knew the rates and then he claimed it was an honest mistake.


None of that crap with meru. You phone/text them they know the rates and you know what you paying for.

del

I think the biggest advantage of organized retails will be logistics .. as these companies will invest directly in making their logistical chains to get farm products directly from farmers and store them. They will also help farmers move away from highly inefficient food crops to cash crops like vegetable and fruits with much higher margins. i can see them partnering with farmers to get the highest possible yields like what happened with potato farmers and chips makers !!!

We waste 30% of all our vegetable and Fruit produce due to lack of storage . once that is changed and yields increase we can expect lowering of prices and also due to competition prices will be lower.

Restricting the supermarkets to big cities for now is ok but it will move down to smaller cities in due course of time ... I don't think it will cause any mass unemployment as being advertised by a lot of vested interest but it will just lead to rationalization of the industry .. not all baniyas want their sons to sit in their shops .. there number will definitely go down !!

One of the other benefits will be higher tax revenues .. as we all know that our neighbor baniya hardly pays tax for his income .. thats the case with all irregular private businesses in India .. Big companies will pay more tax and in a much more transparent way !!

I can't wait for teh retail revolution in India .. i think it will change shopping in India as we know it .. for good. I hope MMS implements it before he is kicked out in nest elections .. that guy did a lot for India as a FM and I hope he can get over all the corruption and finish this ( and a few other) reform !!

Bharat closes in on India in FMCG consumption

India Inc does it all: Distribution beef-up, rural-specific products, lower price points.

The myth about the great rural-urban divide in household consumption patterns has been busted. Bharat is indeed keeping pace with India when it comes to spending on most fast-moving consumer goods (FMCG), prompting companies to step on the gas with innovative marketing strategies.

According to data provided by market research agency IMRB, rural penetration of a wide range of products such as soaps, shampoos, washing powder, hair oil and biscuits is now almost the same as urban India (see chart). For example, toilet soap penetration is as high as 99 per cent in January-July, and 97 per cent for washing powder. For biscuits and hair oil, it’s a creditable 83 per cent.


Companies such as Godrej Consumer Products (GCPL), Marico, Parle Products, Dabur India and Hindustan Unilever (HUL) say the main challenge to increase sales further in rural areas is to beef the distribution reach as far as these products are concerned. Products where the penetration level is still low in rural India are convenience foods and beverages such as soft drinks, noodles and sauces. But that is changing fast as the purchase volumes of noodles, macaroni and vermicilli went up nine per cent in the same period compared to a year ago. As a result, penetration went up from 26 per cent to 30 per cent. The trend is no different with soft drinks, where purchase volumes were up 24 per cent between January and July versus the corresponding period last year. Consequently, penetration moved from eight per cent to 11 per cent.
Companies operating in this space — Coca-Cola, PepsiCo, Nestle and Capital Foods — say apart from distribution muscle, they are bringing in more innovative and affordable products specifically targeted at rural consumers. “We are rapidly increasing the distribution reach from the current 300,000 stores to 1.2 million stores in two years. Tier-2 and 3 towns were our distribution and media focus all of last year,” says Ajay Gupta, managing director, Capital Foods, the maker of Smith & Jones and Ching’s noodles.

In biscuits on the other hand, Parle Products, the country’s largest manufacturer, is trying to push rural consumers to trade up, or buy more premium products. In simple terms, it means moving up from merely glucose biscuits to the premium creamy or cookie biscuits. “There is only one option when penetration is high,” says Pravin Kulkarni, general manager, marketing, Parle Products, “and that is to move to value-added products”. That is why Parle is selling creams and cookies at Rs 5 — almost half the earlier price point. As a result, the glucose biscuits market, which used to be 50 per cent of the category a few years ago, has shrunk to about 45 per cent.

Pushing consumers to buy premium products by tapping into niche segments within the same category is one part of the strategy. The other is to nudge consumers to shift from unbranded to branded products. Marico and Emami are doing that with great effect in the well-penetrated hair oil market.

Sameer Satpathy, executive vice-president and marketing head, consumer products, Marico India, maker of the Parachute brand of hair oils, says while the penetration of hair oils is high, there is still room for growth.

According to market experts, unbranded hair oil accounts for 40 per cent of the category. Satpathy also says companies have to create new occasions for hair oil consumption, and that explains the launch of cooling oils or hot oils or body oils by many players. “Broadly, the strategy is to not only have a presence in the larger segments, but also look at developing emerging niches,” he says.

Emami is also following a similar strategy. Priti Surekha, director of the Kolkata-based company, says, “The way forward in hair oils is to help consumers, especially in the rural areas, to make the switch from loose to branded or aid new consumption habits either with novel products or new formats.”

For instance, Emami has the regular Navratna Cooling Oil, which is the leader in the Rs 600 crore cooling oil category, besides Navratna Extra Thanda Oil or the Navratna Coco Cooling Oil, launched recently. It is now test-marketing a unique five-in-one oil in West Bengal called Hair Life Five Oils, which is a mix of five oils including coconut, amla, almond, olive and jojoba. The product will be rolled out nationally in six-seven months, Surekha says.

In toilet soaps, GCPL, the second-largest player, says the company is focusing on the upgrade of products and improving per capita consumption. GCPL registered 17 per cent growth in soap sales in the first quarter of the current financial year on the back of this strategy.

The company’s rural driver is the Godrej No 1 soap brand, which is now being offered in rural markets at a price point of Rs 5, according to distributors, compared to the regular pricing of Rs 11-12.

The story is slightly different for companies which operate in product categories where rural penetration is relatively low. Nestle India does not divulge details, but analysts say its decision to launch Rs 5 Maggi noodles last year with a focus on rural markets has worked wonders.


Manoj Menon, senior analyst at Kotak Institutional Equities, says Nestle has done two things: reduce price points and go for massive expansion of retail outlets in rural India to push sales.

Nestle has been adding 300,000 outlets every year, mostly in rural markets, to make Maggi availability easier. PepsiCo is looking at a different strategy: it is planning to come up with products below Rs 5. But, it is equally clear the price points of its existing portfolio of carbonated drinks in PET bottles or returnable ones cannot be brought down. So, it has to come out with new delivery models and new low-cost products.

One answer is to go in for dispersed production across the country, so that there is a factory within 250 kms from the retailer.

It is also experimenting with a new distribution model, which can carry cheaper products (for example, retailers with no fridge but only cold boxes).

Manu Anand, chairman & CEO of PepsiCo India, says, “We are in 1.5 million retail touch points now; but that has to increase as the bottom of the pyramid market provides us with a huge opportunity.”

PepsiCo India and its JV partner, Tata Global Beverages, are already test-marketing ‘Glucoplus’ in Maharashtra at Rs 5 to see if it works. “Glucoplus provides the right hydration salts because it is for people who work hard and sweat a lot,” Anand says.

Coca-Cola India president Atul Singh agrees. “More than 700 million people still live in rural India and an individual needs two litres of fluid per day. We see a lot of opportunity as the consumers there also have a right to have access to products we consume in cities” he says.

Coke’s answer to cost reduction is to take the powdered sachet route. It has piloted ‘Fanta Fun Taste’ for Rs 5 in certain markets; it can be mixed with water and consumed. The company is also looking at lightweight packaging to reduce costs in some beverages.

http://www.business-standard.com/india/news/bharat-closes-inindia-in-fmcg-consumption/448089/

Audi India records sale of 3655 cars Jan– Aug 2011

Source: Indiainfoline


Audi, the German luxury car manufacturer, recorded yet another impressive performance with a sale of 510 cars in August 2011 (August 2010: 250 cars). For the period January – August 2011, the company sold 3655 cars, a growth of 95 percent over the same period last year (Jan – Aug 2010: 1876 cars).

“We are delighted with our outstanding sales performance in India this year. India is an important market for Audi worldwide. Having recorded 95 percent growth for the period Jan-Aug this year, India is well ahead of other growth markets for Audi globally, and we are confident that we are on track with our vision of being the No.1 luxury car manufacturer in India latest by 2015. The recent launch of the all new Audi A6 will play a very important role in strengthening our position in the luxury limousine segment and the new Business Edition Audi Q5 will further consolidate our leadership position in the luxury SUV segment in India. Currently we are benefiting from strong global image, a remarkable product portfolio in regards of progressive design, sportiness and performance paired with very efficient engines and a very attractive franchise which allows us to choose the best dealer partners in the industry. This allows us to defend our No. 1 position in China and Europe and makes us the fastest growing luxury brand in India.”

“The upcoming Frankfurt Motorshow, with an unseen presence of the Audi stand in our 102 years of history, will show the competence of Audi in fields of lightweight, e-mobility and design and we are proud that all our dealer partners will join us there. While other players in the Indian market are currently reviewing their targets downward, we are confident, that we will exceed our set target of 5,000 Audi’s this year.” said Michael Perschke, Head, Audi India.

World largest retailers like Wal-Mart to operate in India with a majority stake

draft cabinet note suggesting so-called mult-brand retail foreign firms could hold up to 51 percent ownership has already been reviewed, a senior government source said on Friday.

"We have already sent it to the cabinet for their approval," the source said, adding that a decision could come next week.

Inadequate road, rail and storage facilities mean significant logistical hurdles and extra expense in moving farm and factory goods to Indian consumers, driving up prices nationwide.

Wholesale inflation in India has remained stubbornly high for more than a year and is now close to 10 percent despite 13 interest rate rises by the Reserve Bank of India (RBI) since March last year.

Small shop owners that account for more than 90 percent of India's $450 billion retail sector oppose the entry of foreign players, fearing that they will be put out of business.

India currently allows 51 percent foreign investment in single-brand retailers and 100 percent for wholesale operations, a policy that Wal-Mart and Carrefour among others have lobbied to change for years.

Another government source said the finance ministry had thrown its weight behind a second proposal to raise the cap on single-brand retail to 100 percent from 51 percent.

The cabinet note also stipulated businesses would have to source at least 30 percent of manufactured and processed goods from local small industries, the Business Standard newspaper reported on Saturday.

It also said the minimum amount a foreign retailer would have to invest was $100 million, at least half of which would go to "back-end" logistics and storage infrastructure.

Link (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/world-largest-retailers-like-wal-mart-to-operate-in-india-with-a-majority-stake/articleshow/10791302.cms)

I don't get one thing though - If the supply chain logistics is KNOWN to be crippled nationwide - as is indicated in every article that features Multi Brand Retail and how Chains like Walmart will plug the gap - why hasn't any Indian firm taken this on as a business model and launch Hypermarts with supply chain logistics corrected ?

the only thing Walmart etc can bring in is giant capital!! But they too will be coming into an alien market - and certainly wouldn't know squat about the frustrating middlemen-politician nexus that is so corrupt !! So other than the cash and their 51% majority stake - what will they bring in?

The only thing I can think of is cold storage tech but am sure we have enough refirgeration skills in the country to get over this obstacle too.

There is a learning curve for any new bsuiness. If Tata wants to set up a bank in India, it cannot become an ICICI/SBI or even Citibank(which faces numerous regulatory constraints) in 3-4 years.

I think it was this rationale which stopped FDI till now. Now even after so many years, Indian firms are still learning. Further, the capital is another constraint for Indian firms. MNCs wouldn't have much capital or technical constraints. As you rightly pointed out, they have to deal with red-tapism. There are high possibilities that they might succeed though it is not guaranteed. Nevertheless there is no harm allowing them in, the time is ripe for that.

Great News!! Shot in the arm for India and its antiquated supply chain system. Not to mention for the consumers. Expect to see a Walmart Super Center near your neighborhood!! :)

Cabinet cleares 51 percent FDI in multi-brand retail

The much debated 51 per centFDI in the multi-brand retail sector was today cleared by the parliament, a move which will pave the way for opening of global retail stores like Wal-Mart, Carrefour and Tesco in major Indian cities worth an estimated $450 billion a year.

India will open the country's retail industry to foreign supermarkets, a cabinet minister Thursday told reporters, a much delayed reform expected to help unclog supply bottlenecks and ease inflation over time.

BJP and other political parties including UPA allies had opposed the move.

It also decided to raise the cap on foreign investment in single-brand retailing to 100 per cent from 51 per cent, Food Minister KV Thomas said

Source : http://www.dnaindia.com/money/report_cabinet-cleares-51-percent-fdi-in-multi-brand-retail_1616947

IKEA also, i hope

BJP, Left Parties and Trinamool oppose FDI in retail..

I don't see how this proposal will go through..

I can understand Left opposing but I dunno why BJP is opposing! Stupid Politics!

BJP is LALA party. lot of baniya opposing this bill

what?????? guys congratzzz!!! the parliament doesn't need to clear it, it only needs cabinet approval! So YES it is the biggest reform in last 20 years.

True - BJP will come around after making some noise. Left parties have no clout left. The only unpredictable and serious threat left is the Trinamool. Its well known Mamata Banjerjee has no concept of economics - her opposition to this is purely populist. Her threats may force the govt to reduce foreign holidng to < 50%, even though the bill is passed - which pretty much is as good as not passing the bill. Lets hope there's no rollback - India needs this one desparately!!

really looking forward to improvement in logistics and cold storage. and better procurement deals with the farmers.

Great News!! Shot in the arm for India and its antiquated supply chain system. Not to mention for the consumers. Expect to see a Walmart Super Center near your neighborhood!! :)


Source : http://www.dnaindia.com/money/report_cabinet-cleares-51-percent-fdi-in-multi-brand-retail_1616947

cant realy see whats great about having a wall mart in your area but yep its good to open up the retail sector.
whens this becoming law?

Its not just having a walmart store. Walmart and the large hypermarkets have historically been instrumental in fixing and operationalizing broken supply chain (in our case our FCI dominated Farmer-middleman-middleman-middleman-mandi-trader nexus) as well as hugely increasing the farm incomes because of transparent futures-regulated pricing mechanism.
40% of our food grains go to waste in absence of such logistics and cold-storage facilities. More importantly Farmers get not even half of what they deserve because of opaque procurement policies and middlemen. End consumers end up paying through their noses which the farmers don't even get a sliver of. And because of the wasteage and broken system - the mechanism to control inflation doesn't exist and inflation itself rises as supply is hugely suppressed because of the same wasteage!!

yeah - multi-brand retail is probably one of the biggest reform measures this decade, save for Lokpal and the administrative reforms!! Its not just about a store!

cant realy see whats great about having a wall mart in your area but yep its good to open up the retail sector.
whens this becoming law?

:doh: this doesn't need to become law, it is PASSED and now can be implemented

Tesco ready for huge new market as India opens to foreign supermarkets


Tesco is today eyeing up a huge and lucrative new market after India’s government changed rules to allow in foreign supermarkets.
India has a population of 1.2 billion and a fast-growing affluent middle class of 160,000 that is expected to grow to 267,000 within five years.

But access to country’s retail market, estimated to be worth £300billion a year compared to around £325billion in the UK, has until now been restricted by ownership laws.

Yesterday, the country’s cabinet yesterday approved 51 per cent foreign direct investment (FDI) in multi-brand retail and increased the FDI cap in single-brand retail to 100 per cent despite much political resistance.

India currently allows 51 per cent foreign investment in single-brand retailers and 100 per cent only for wholesale operations.

Read more: http://www.thisismoney.co.uk/money/markets/article-2066183/Tesco-eyes-huge-new-market-India-opens-foreign-supermarkets.html#ixzz1ekkxlzn4



Carrefour hails India's retail liberalisation move

World No. 2 retailer Carrefour on Thursday hailed India's decision to open its supermarket sector to foreign players and said it would continue to develop its existing cash-and-carry business in the fast-growing market.

The Indian government threw open its $450 billion retail market to global supermarket industry giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia's third-largest economy.

Foreign players are already allowed to operate wholesale, or cash & carry, stores.

http://in.reuters.com/article/2011/11/24/idINIndia-60721020111124


Will these large superstores be out of city shopping centres or like city malls? There may well be a huge increase in demand for retail space in the coming years due to these stores.

I don't get one thing though - If the supply chain logistics is KNOWN to be crippled nationwide - as is indicated in every article that features Multi Brand Retail and how Chains like Walmart will plug the gap - why hasn't any Indian firm taken this on as a business model and launch Hypermarts with supply chain logistics corrected ? .

Nope. Walmart is far superior when it comes to their supply chain even by US standards. You just have to work inside for few years to truly appreciate it.

Also I tend to agree with one of the previous postings that there is huge learning curve for Indian companies to reach western standards (even more for WM standards). With no experience in retail it will take decades for our folks to get there

5 States are game for FDI in retail, says Sharma

CHENNAI, NOV. 26:
The Union Minister for Commerce, Industry and Textiles, Mr Anand Sharma, on Saturday said that five States have indicated their willingness to go ahead with giving licences for foreign companies in retail. (Foreign retailers require licence from the respective State Government.)

Answering a question at a press conference here, Mr Sharma said that Punjab was very upbeat about FDI in retail. The other four States are Haryana, Maharashtra, Rajasthan and Orissa. He said four Chief Ministers had already written to the Union Government saying that they were game for FDI in retail.

“It is only two days since the policy was announced,” Mr Sharma said, expressing hope that more States would open up their retail markets for foreign participation.

Observing that the presence of large retailers who would buy directly from farmers would be good for both farmers and consumers, Mr Sharma said that he sympathised with farmers in States that are not ready to allow FDI in retail.

On the order of investments expected to flow in terms of FDI in single brand and multi-brand retail, the Minister said that it would be “not in hundreds of millions, but in billions.”

GUIDELINES

Mr Sharma said that the guidelines for implementation of the FDI policy would be issued within a week.

Asked about dissent among political parties over the FDI policy, he said, “policy-making is the remit of the UPA Government.”

PTI reports: Mr Sharma said that the policy is “distinct and different” and interest of small retailers has been taken into consideration.

“The FDI policy is distinct and different and has the Indian signature,” he said.

The interest and sensitivities of small retailers have been taken into consideration and “they are part of the policy embrace”, he said when asked whether the Government would take steps to allay fears over the measure, which has drawn sharp reactions from political parties and retailers.

Mr Sharma said the political parties would “certainly realise” the benefits of the Government's bold move, and added that such opposition was common.

He recalled that the previous Congress governments in the 1980s and 1990s, led by the late Rajiv Gandhi and late P.V. Narasimha Rao had gone ahead with reforms in IT and communication and economy, only to reap benefits now.

Mr Sharma insisted that the decision on FDI was not an “overnight policy” and said no policy rollout would be without opposition and criticism. He added that a sincere effort had been put in to take on board concerns of all stakeholders.

On consensus in the Cabinet over the FDI policy, he declined to respond to media reports but said there would be “discussions and debate.”

source (http://www.thehindubusinessline.com/industry-and-economy/article2663061.ece)

good for Maha

So the supply chain will get rationalized in the form of Farmer-Superstore-Consumer or Farmer-Superstore-Gupta Ji-Consumer in the future , is that right.

If so it'll be such a relief for everyone involved as the endless list of wholesalers will come to an end. I don't get why parties such as BJP (whom I always thought had a sensible train of thought) would oppose such a move, their reasons are ridiculous.

IKEA set to announce retail plans for India


NEW DELHI: Scandinavian home products giant IKEA that has stayed away from the Indian retail sector saying it will do so only on its own, is set to announce its plans for the market with the government allowing 100 per cent FDI in single-brand retail.

According to people familiar with the development, IKEA's President and Chief Executive Officer Mikael Ohlsson is visiting India this week to "announce strategic initiative for Indian market ".

Details of IKEA's plans, however, could not be acertained.

In the past, India allowed only 51 per cent foreign direct investment (FDI) in single-brand retail. Last week the government had removed the cap and allowed international firms selling products under one brand name to tap the growing consumer base here without a local partner.

Moreover, the government had also allowed 51 per cent FDI in multi-brand retail.

IKEA has been sourcing many materials from India for a long time now. It has been adopting a wait and watch policy to open its retail stores as it wanted to operate on its own.

The firm also supports Unicef's water and sanitation programme in India and funds programmes in the carpet and cotton regions in the country.

In 2010, IKEA's sales increased to 23.1 billion euro, an increase of 7.7 per cent compared to the previous year, with Asia and Australia contributing about 6 per cent.

The Group has operations in 41 countries with 29 trading service offices in 25 countries, according to its website.


http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/ikea-set-to-announce-retail-plans-for-india/articleshow/10893042.cms

Govt launches campaign to sell FDI in multi-brand retail



NEW DELHI: Under attack from the Opposition and UPA ally Trinamool Congress on allowing global retail chains in the Indian market, the government on Sunday launched a campaign to sell advantages of FDI in multi brand[/URL] retail.

In a full page advertisement in newspapers, the commerce and industry ministry said foreign direct investment (FDI) in multi-brand retail will help farmers, create more jobs and benefit consumers.

It said there are several myths on the issue. These include that kirana and retail stores will lose and retail sector will be controlled by foreign stores.

On the other hand, the reality is that domestic retailers will benefit from sourcing their requirements from wholesale cash and carry store at a discount, it said.

The government said in countries like China, Thailand, Indonesia, Brazil and Singapore, where there are no caps on FDI, small retail stores have flourished.

The government advertisement said that there is another myth that FDI in multi-brand may result in job losses. .

"Contrary to this mistaken belief, FDI in multi-brand retail will generate 10 million new jobs."

It said that it is also a fiction that farmers would be exploited and lose their fields and crops to foreign investors. On the other hand, "farmers will receive better remuneration for their produce".

In a bold decision, the Cabinet on November 24 decided to allow 51 per cent FDI in multi-brand retail and removed the 51 per cent FDI cap on single brand retail.

Almost the entire Opposition and Trinamool Congress are up in arms against the decision and have paralysed Parliament in protest.

Some chief ministers of the states, ruled by the central opposition parties, have also expressed anguish on opening up of the sector for foreign chains like Walmart and Carrefour.

Uttar Pradesh chief minister Mayawati has made it clear that her state would not grant trade licence to the global chains.

The final authority of issuing trade licences rests with the state governments.

Commerce and industry minister Anand Sharma has expressed hope that states would welcome the decision and open their doors for the foreign chains. He said he was sympathetic to farmers and consumers in those states where the mega stores will not be allowed.



[url]http://timesofindia.indiatimes.com/india/Govt-launches-campaign-to-sell-FDI-in-multi-brand-retail/articleshow/10891030.cms (http://timesofindia.indiatimes.com/topic/FDI-in-multi-brand)

its interesting that in sri lan ka that has more libralised economy multi brand mini markets , usually sri lankas Cargills , have sprung up all over the place(mini super markets say with only 2 - 5 check outs)
you can be in a '2nd or 3rd tier' city or town but still have access to proper supply chains and modern standards and choice
i hope this happens in india to rather than one or two big hypermarkets outside each metro

It looks like the FDI reforms won't be beneficial to Indian enterprises and many in the cabinet and Congress party weren't aware of this:

Govt clarifies on 30% sourcing norm for foreign retailers (http://timesofindia.indiatimes.com/business/india-business/Govt-clarifies-on-30-sourcing-norm-for-foreign-retailers/articleshow/10886461.cms)

NEW DELHI: Government's clarification on Friday that multi-brand foreign retailers are not required to source 30% of their procurements from Indian small and medium enterprises has surprised some members of the Union Cabinet who approved the decision.

"It is contrary to our understanding," said a member of the Union Cabinet. He said that he and some other ministers had felt that the norm requiring multi-brand foreign retail biggies to source 30% of their purchases from SMEs was designed exclusively for Indian small and medium players. "That was the impression we all got when minister for micro, small and medium enterprises Virbhandra Singh asked about his demand to mandate the foreign retailers to do a 30% sourcing from small and medium enterprises. We could not have suspected otherwise since he is a minister in government of India," said the minister.

The 30% sourcing norm was supposed to provide a political cushion against the argument that entry of multi-brand foreign retailers would hurt domestic interests, and was repeatedly underlined in the Cabinet meeting on Thursday when ministers like A K Antony expressed their fears about the fallout of the decision for domestic traders.

Government's clarification on Friday that the 30% stipulation does not bind the foreign players to buy from Indian small and medium businesses alone, and that they could comply with the conditionality by making purchases globally.

Congress sources also expressed surprise by government's interpretation of the 30% norm, and admitted that it would make the difficult job of defending a controversial decision even more tougher. "This knocks the basis out of the trade-off argument; that any loss because of the entry of foreign retailers will be compensated by gains for small and medium business," said a senior party functionary.

And with that we can expect a flood of cheap maal from the eastern neighborhood.

^^ no need to worry, the logistics cost will be high if they source from outside India, also if there is a flood then govt. will introduce taxes.

For how long these parties are going to oppose this bill? is there any real threat there.DMk & TMC from govt opposing it.

Another fine mess!

I dont oppose FDI in retail but even the rules aren't clear.

There is a supermarket on every coner here in the UK which has dessimated the local (small/medium) shops. Hope this dont happen in India since its generally mom & pop stores.

Tesco stores are abound here & so is Walmart with their Asda brand. In my city we have 4 large Tesco stores (2 Super stores) & many smaller stores called Tesco-Local in High Streets which is too many! These stores are not even full when I visit Tesco. In some towns tesco has just taken over resulting in much apathy towards their domination & loss of sales in local stores.

FDI in retail: Foreign brands to source 30% from SMEs
Foreign supermarkets wanting to set up shop in India will have to source 30% of their produce from local, small industries, a government statement said on Monday, appearing to change the rule within days of announcing a supermarket policy.

The government on Thursday approved 51% foreign direct investment (FDI) in supermarkets, paving the way for firms such as Wal-Mart Stores Inc, Tesco and Carrefour to enter one of the world's largest untapped markets.

Last Friday, a government statement had said supermarkets could not be forced to source their wares from Indian industries as such a policy would not be compliant with guidelines from the World Trade Organisation (WTO).

Link (http://www.moneycontrol.com/news/asian-markets/fdiretail-govt-clarifies-sourcing-rules-for-foreign-brands_625392.html)

Hm - I think what they have done is - initially they intentionally announced the policy without the 30% rule. Then when opposition grew (as expected) they introduced it. All part of a plan to mute the protests, I think. :lol:

Good strategy though. :applause:

^^ it was in the discussion paper that DIPP floated, so it was always there. It was the MEDIA which didn't highlight the points, for more details please have a look here:

Please a request to everyone, read this as this is credible not like the f****** media channels (http://www.slideshare.net/whatislokpal/cabinet-decision-on-fdi-in-retail)

and yes the opposition is being truly paralyzing the country, first it was UPA govt. and now it is opposition. Seriously i think that if such opposition stays then we will be back to 5% growth whether NDA is there or UPA, because it will be tit for tat and the congress will do same thing if NDA comes to power in 2014.

FDI in retail: Foreign brands to source 30% from SMEs

Link (http://www.moneycontrol.com/news/asian-markets/fdiretail-govt-clarifies-sourcing-rules-for-foreign-brands_625392.html)

This is 30% from smes globally not from indian smes....Arun jaitley made this point to times now arnab....

Another fine mess!

I dont oppose FDI in retail but even the rules aren't clear.

There is a supermarket on every coner here in the UK which has dessimated the local (small/medium) shops. Hope this dont happen in India since its generally mom & pop stores.

Tesco stores are abound here & so is Walmart with their Asda brand. In my city we have 4 large Tesco stores (2 Super stores) & many smaller stores called Tesco-Local in High Streets which is too many! These stores are not even full when I visit Tesco. In some towns tesco has just taken over resulting in much apathy towards their domination & loss of sales in local stores.


and whats wrong with that?

so long as they reduce prices.

The fact everybody is missing in this is that our farmers will get a better deal.


Plus its time the consumer was respected.



As far as the 30% thing goes, the way i see it the days of china having the capacity to undercut Indian manufacturing are long gone.

I mean for heaven sake in the past 5 years the Indian rupee has cheapened 50% against the yuan.(thats not even taking the decent dip into account). If our manufacturers still cant compete then its time to throw in the towel.


The only thing which needs to acompany the FDI law is the employment laws.

^^ Fair Enough, but how do you think india will be able to absorb 40 million people from unorganised sector in post FDI Era ??

^^ Fair Enough, but how do you think india will be able to absorb 40 million people from unorganised sector in post FDI Era ??

Well this is a broader question, not a retail only sector absorption equation. You have to let market forces supply the jobs. I think it is possible to gradually move the unorganized sector into modern jobs. There is shortage of workers in the infrastructure sector throughout India. Better training and ITIs would give the impetus.

On this Mom&Pop stores being devastated, let us step back a little and ask ourselves who these mom & pop really are. They constitute the middle and upper middle class, they are certainly not classified as the poor. So, let them fend for themselves, why should govt bail them out. They have the skill set to blend/adapt into modern economies. e.g. A Walmart was one of these middle class folks who went on to become the world's largest retailer.

The Govt does not need to baby sit the Indian industry anymore. I trust a Marwari/Sindhi/Patel/Baniya/Chettiar/Nadar to trump anyone in the world of business. Just give them a plain level field and see them outshine the big guys.

At stake is the modernization of India along the lines of most nations in the world. Modern logistics, just in time delivery, efficient farm to house delivery methods are needed. Eventually the people of India will vote with their money. There will always be farmer's local market frequented by the people despite the big guys being in retail. All large cities are already operating in this mode. In Bengaluru for example the Sunday/Saturday farmers market are sold out in a few hours despite the convenience of big retail stores.

^^ Fair Enough, but how do you think india will be able to absorb 40 million people from unorganised sector in post FDI Era ??

FDI will not make all these 40 mn people jobless in a single day or a year, for that amtter. It will take atleast 25 years for the organised retail to reach the current penetration of developed countries. Is it difficult to absorb these people within such timeframe considering that general public will have access to cheap goods (people who say that prices will be high after the biggies conquer the market have to check the prices in developed countries in comparison to PPP).

The MNCs cannot penetrate core city areas due to expensive real estate and lack of large land parcels as per their requirements. Imagine, where in Bandra, Walmart will find even a 10000 sq ft space. Further mom & pop stores operate in different segments. While we buy bulk purchases from Hypercity, the small purchases are often made in nearby supermarkets on phone. Home delivery on call, customer preferences and store timings (small stores are open till 11.30-12 in the night in Mumbai, which the biggies cant do) will remain the biggest advantage of these mom & pop stores atleast for the next 10 years. The MNCs may not find it viable to operate small stores in the core city areas. The core city areas have to wait for a re-organisation to get these big-format stores,

^^ Fair Enough, but how do you think india will be able to absorb 40 million people from unorganised sector in post FDI Era ??

it wont untill it gets competitive.

and for that you need reform in other sectors like textiles especially where dumb laws means firms dont expand and are forced to use child labor.



The way i see it, how many sectors is India going to protect? I fully agree and agriculture needs to be protected.

but way too many sectors are protected.


You become uncompetitive on the global scale if you dont reform.

Also i would like to say,

for how long are you going to remain in the stone age?

what next, no computers at work cause one computer does the job which a person can do?


Lets not use email cause then post office loses its buisness and people are out of work?



Technology and practises move on,



Pretty soon India will have to confront the issue of small uncompetitive farmers who use outdated methods of farming. So do we ban the tractor cause it does the work of some landless labor?



Somebody will have to build the stores, somebody will have to staff these stores. I think i am right in saying that the population of people doing that will be more than the population of mom and pop stores and middle men who will be squeezed as a result of this.

Not to mention jobs created in warehouse infra food processing and packaging industries.


As India dream says, bulk purchase megastore, convenience ----> mom and pop.

Excellent points MeMumbaikar!! :cheers:

Lot of Indians with commie leanings have begun to infest all corners of cyberspace. They have become so used to the mai-baap sarkar that they cannot comprehend anything of this sort.

Add to it, the retards who claim that this will lead to "colonization of India again". Seriously, how moronic can one get?

Bangaluru Geek,

As a consumer what we need is a non monopoly. In any sector. So if Americans compete with the French who inturn compete with the British who inturn compete with other Europeans in all of India's cities/ towns and villages. Its not colonisation if people compete with each other. The economic basis for colonisation is a captive market. Which this will not be. Case in point the British took cotton from India processed it into clothes in Manchester and then sold it to the Indians are higher rates while at the same time taxed local textile producers and also taxed european producers. They did this in every colony. After they lost their empire Manchester went bust. Cause they their manufacturing technique was shit and the germany and europeans were cheaper and better.



Not to mention food processing and warehouses will be constructed near the farms and away from cities where land is cheaper. Which means this can generate good rural employment in the near term.

That is fantastic right? somebody earns a good wage in the village and does not have to come to the city? Reduces the load on the city.



I read a report once that the GOI allowed starred hotels to buy their own farmland for their needs in partnership with local farmer who owns the land. The yield of those lands compared to non adjoining lands are which are not in partnership are 5 times higher for the similar crops.




so enough of these backward steps. China which is a commie country allowed the likes of Walmart a long time ago to enter its shores.


now if the commie leadership can see this as beneficial. Why are our commies not looking to their neighbours?

^^ leave alone commies, Uma Bharti said that she will burn herself where ever a WALMART stores open... just wait for the bank accounts of commies, BJP, DMK, TMC to be filled everyone will agree.

dumb fcuk bjp

they keep acting like this i will vote for the congress next election

bhai same was with nuclear liability bill, as i said it is a matter of days when the accounts will be filled by good amount of $$$s.

BTW 7 days no parliament :bash:

at least let parliament work, if you want to protest against a decision then you do but this is not the way, out of 22 sessions 7 are already wasted.

For all those who think FDI is a good idea and manna from heaven. A big Reality Check :

http://www.rediff.com/business/slide-show/slide-show-1-column-fdi-in-retail-whom-are-you-kidding-mr-pm/20111130.htm

In the US Walmart and other chains have wiped out (to extinction) the small shop-owners. It has taken the joy out of the experience of shopping which comes from buying from shops of varying size and shapes and off-course from prices/wares which differs from shop to shop.
In the US shopping is reduced to a bland and almost "antiseptic" experience where like zombies everyone goes and shops for same (people call it standardized and hence better) articles from similar racks in indistinct looking aisles housed in sqaure/rectangular shaped blocks. Yucks!!!!!

Snake-oil peddling salesman have tried to spin doctor FDI as a magic bullet which will bring nirvana to everyone. Think again. These retail behemoths will first engage in predatory pricing to finish up the small retailers/shop owners by initially paying attractive rates to the farmers and manufactureres and once they are established will then do a reverse pricing kill on them. Check the rediff article and see whats in store in the not too distant future for India.

Millions of small shop keepers in India will quite simply be wiped out.The greedy Congress leaders are meanwhile too busy planning on which tax heaven to go to depoist the graft/kickbacks that they will receive from the retail giants and their agents in India.

and whats the economic basis for this rediff article?

Its not as if mom and pop stores cant be beaten on quality.

Last time my family bought lentils from my local mom and pop stores a 1kg bag the vendor claimed to be was actually 700 grams. It also contained many incests.

Gimme a bland shopping experience any day. Quite frankly if you want shopping to be an experience rather than a chore or burden like i view it as , you must live a very bland boring life. Go out, goto the bar goto a temple.

I mean who the hell seeks a thrill in shopping for groceries and essentials?

and your telling me that prior to the retail FDI, onions in mumbai rising to Rs70 per kg and then falling to Rs8 in the space of 2 weeks was normal?

The facts mentioned in the article more then speaks for themselves.You mean you do not see the economic fact in the way the farmers collective wealth is exploited by the retailers. Gimme a break.
As far as leading a interesting life is concerned i do way better then going to a bar /temple.
Well shopping like a zombie or looking for small thrills in a more varied shopping atmosphere are choices that an individual makes.
Sure local shop keepers may be indulging in unfair pracices but that does not mean that you give carte-blanche to foreign retailer to bood suck your citizens and become more powerful to repeat the same experiment in some other/new country.

The facts mentioned in the article more then speaks for themselves.You mean you do not see the economic fact in the way the farmers collective wealth is exploited by the retailers. Gimme a break.
As far as leading a interesting life is concerned i do way better then going to a bar /temple.
Well shopping like a zombie or looking for small thrills in a more varied shopping atmosphere are choices that an individual makes.
Sure local shop keepers may be indulging in unfair pracices but that does not mean that you give carte-blanche to foreign retailer to bood suck your citizens and become more powerful to repeat the same experiment in some other/new country.


and middle men dont do that already?


Are you new to India?


you do realise competition drives down prices. Let the middle men and mom and pop stores compete.



Your sitting in the cathedral of capitalism, which is the USA. I think its highly ironic you enjoy the benefits of capitalism of one country only to become socialist in another.

dumb fcuk bjp

they keep acting like this i will vote for the congress next election

Waah!!!saare scams ignored! Mera bharat mahan!!!

India needs western supermarkets

The Indian government should ignore opposition to foreign-owned retail superstores as they will meet rising domestic demand and create jobs


reddit this

Comments (19)




Customers shop at a Best Price modern wholesale store, a joint venture between Wal-Mart and Bharti Enterprises, at Zirakpur. The Indian government has just decided to open its supermarket sector to global retailers. Photograph: Ajay Verma/Reuters


Last Thursday, an irate man agitated over rising prices walked up to India's agriculture minister Sharad Pawar, and slapped him, an assault captured on live television. At 9.73%, the inflation rate is reaching the politically significant double digits that can spell trouble for governments. Prices of essential commodities, including staple foods, have been rising just as the rupee has been falling, making imports dearer.

The slap was coincidental, but the ruling United Progressive Alliance (UPA) sprang into action, and later in the week it permitted foreign investors a majority stake in India's retail sector. One effect, the government hopes, will be more efficient distribution and less wastage, leading to reduced prices for consumers. That may happen if everything goes to plan. But leaving nothing to chance, the opposition – left and right – protested. Two chief ministers – from Tamil Nadu and Uttar Pradesh – said they wouldn't allow foreign-owned retail superstores in their states. Uma Bharti, a Hindu nationalist politician, has threatened to burn the first supermarket she finds.

The government remains, for the moment, committed to the step. The commerce ministry claims 10m jobs will in fact be created, 60% of them in logistics, and several officials say the decision will jumpstart India's stalled economic reforms.

That it does. Investors have been lukewarm about India's commitment to reforms, given the lacklustre enthusiasm for liberalisation within the ruling coalition in recent years. The UPA rode to power arguing that reforms (which it had initiated in 1991) were not benefiting the poor. Instead of hastening reforms to deepen their reach to include the poor, the government slowed the pace, and, at times, reversed the direction. Opening the retail sector, the government hopes, will revive interest in India.

Critics of the retail policy make five points. One, India doesn't need foreign retailers, since homegrown companies and traditional markets are doing the job well. Two, independent stores will close, leading to job losses. Three, profits will go to foreigners. Four, there will be sterile homogeneity and Indian cities will look like cities anywhere else. And five, the government hasn't built consensus.

None of the objections has merit. India's retail sector of $28bn is expected to grow by a factor of nine within a decade. Domestic demand is rising, and it is simply not possible for India's archaic retail sector to meet that demand. Inbuilt inefficiencies and wastage in distribution and storage account for why, according to some estimates, as much as 40% of food production doesn't reach consumers. Fifty million children in India are malnourished. Food often rots in antiquated state-run warehouses, or in transit. Profit-driven, cost-conscious companies will avoid waste and loss, the government hopes.

While some retail stores may have to close, and some jobs may be lost, superstores will need workers. Some 70% of Indians claim to be farmers, but one of the country's worst-kept secrets is the extent of disguised unemployment in Indian agriculture. Many farmers work in the countryside on small, unproductive tracts, earning minimal income, and are heavily in debt. Organised retail will absorb some of this labour force in better-paying jobs. It is common to see small shops employ workers without proper contracts, making them work long hours, not permitting them to join unions. Many shops depend on child labour. A well-regulated retail sector will presumably curtail some of these abuses. More important, the cheaper prices can only be good in a country where the public distribution network doesn't work properly, and 40% of the people are poor.

There is organised retail in India. Besides new, swanky malls, the country has its Indian-owned super bazaars and supermarkets. Some critics say India doesn't need foreign companies. But that can apply to almost every other sector in the country. From its independence in 1947 until 1991, India attempted to be semi-self-sufficient, during which its economy grew at an abysmally low rate, making no difference to the level of poverty.

Many Indian consumers resent the critics. They find nothing romantic about their hard lives and in these modern conveniences they see signs of development.

To be sure, there is one risk: that the foreign-owned retail companies may find Indian consumers more discerning than others, as some major brands have discovered. The Indian marketplace is littered with examples of well-known brands failing. Should the consumers remain loyal to their cornerstores and should the big box retailers fail, the government will have to resist the politically convenient temptation of bailing out the failures by offering them subsidiaries at taxpayers' expense.

But consumers will gain. Large superstores are inflation-busters. As Charles Fishman shows in his book, The Wal-Mart Effect, big stores squeeze costs and pass gains to consumers because of competition, and they contributed to the sustained low inflation in the US. Modern supermarkets can help tame inflation in India. They may also create jobs, prevent waste and improve logistics. Why would anyone oppose them?

http://www.guardian.co.uk/global-development/poverty-matters/2011/nov/29/india-needs-foreign-owned-supermarkets

Boss lets not get personal. In the above posting also you did that.

and middle men dont do that already?

Check my above post i have already acknowladged the misdeeds of Indian entities.Regardless that does not meam a lisecnce for exploiting for MNC's to loot national wealth.

Are you new to India?

No on the contrary.I am a true blue Bombayite having stayed for a major part of my life in Kalyan/Mulund/New Bombay and have gone through the grind(local train- Ist Class, IInd class and even travelled luggage compartment regularly to beat the peak hour rush(complete with Machchi Pani et al).


you do realise competition drives down prices. Let the middle men and mom and pop stores compete.

Nobody would deny that. Its is what the Retails Giants do after the monoply(in a manner of speaking) is achieved that is being debated here.



Your sitting in the cathedral of capitalism, which is the USA. I think its highly ironic you enjoy the benefits of capitalism of one country only to become socialist in another.

Sitting in the USA has only enabled me to be in a postion to appreciate things for what they are. I am not a Socialist (coming from a business family, we have supplied leather goods and garment accesories to some of the major buying houses in US and Europe and hence know how they operate and what margins they operate).
whatever may be the economic dispensations, no amount of spin doctoring or feel good articles of consumer empowerments can change the ugly face and unethical practices of the Walmarts of this world.

Check my above post i have already acknowladged the misdeeds of Indian entities.Regardless that does not meam a lisecnce for exploiting for MNC's to loot national wealth.

what next your against global trade?

Why should the USA open up their markets or even europe to Indian IT companies?

Why should Indian textiles be exported to the west?

Why should Tata buy Jaguar and Land Rover to loot British national wealth?

Based on your rational Indian companies must ever in their lives try to expand outside India cause it loots foreign wealth.

What do you think companies like Samsung and LG are doing when they sell their gadgets in India? Repatriating their money to S Korea.


If every country had your kind of attitude, the first thing the west would have done is made remitting money illegal. Cause that is a big outflow right there of their national wealth.

Serious question, should Indians in the USA be deported on a compulsory basis so that some less qualified American takes over due to high unemployment?



No on the contrary.I am a true blue Bombayite having stayed for a major part of my life in Kalyan/Mulund/New Bombay and have gone through the grind(local train- Ist Class, IInd class and even travelled luggage compartment regularly to beat the peak hour rush(complete with Machchi Pani et al).

then why leave if your true blue?


Nobody would deny that. Its is what the Retails Giants do after the monoply(in a manner of speaking) is achieved that is being debated here.

there will be no monopoly if 5-6 retail giants share the market. thats the entire point of the free market.

In the UK/Europe for eg every christmas there are large scale price wars between the retailing giants.

Let the big guns fight it out.

Its going to be a repeat of the aviation and telecom sector. A highly fragmented market share.

If anything not letting in foreign player is creating a monopoly of mom and pops plus middle men.




Sitting in the USA has only enabled me to be in a postion to appreciate things for what they are. I am not a Socialist (coming from a business family, we have supplied leather goods and garment accesories to some of the major buying houses in US and Europe and hence know how they operate and what margins they operate).
whatever may be the economic dispensations, no amount of spin doctoring or feel good articles of consumer empowerments can change the ugly face and unethical practices of the Walmarts of this world.


Appreciating does not count for much. I can live in the white house and appreciate many things. The fact is i am leading a life of comfort in a developed country. Its not just the USA every developed country has large scale retail giants. Technically based on your logic the diamond markets of surat need to be shut down due to the high presence of blood diamonds.


nobody said wallmart is a saint. But it combined with other global big players i would take any day of the week than mom and pop stores and middle men.


have you even seen the awful state of the go downs the middle men have? No wonder so many people die. They are littered with rat droppings. In 1999 , about 300 people died in Delhi cause some middle man bought some highly toxic onions and potatos. Sold them through mom and pop stores.


Our mom and pop stores are horrible on quality which affects the health of the consumer. That is a basic right.


And your from mumbai then you will know, that a long time ago food used to be bought into the city via freight/train and the main market was at buyculla. The retailers of mumbai aka the your baniyas or mom and pop stores campgained hard for this to end.

so now what happens? They load their goods at Vashi where the food comes from Nashik. Sell them in Mumbai proper and other parts of the city for 3 times the price. Now you tell me, should I as the consumer stand for this con?

The retailors of India have been protected for a long time at the cost of crap service and quality. Its about time they become competitive or perish and i have a feeling most of them are not competitive and will go down the Air India route.

Waah!!!saare scams ignored! Mera bharat mahan!!!

I will be honest with you

i support the lokpal and am against scams.

But i would rather they pass reforms and have scams than have no reforms at all. We will be stuck in the stone age and our growth will draw to a halt if we dont reform.


One of the best ways to counter scams is to liberalise and not give people the chance to conduct a scam.

Look at these gems of intelligence that the internet commies keep spreading. I saw someone complaining that "They will repatriate their profits back to their home nations". Cool, so kick out Accenture, IBM, Microsoft - everyone. Kick out citibank, Vodafone.. let us go back to the licence Raj days and wallow in our own filth and poverty. :bash:

while modi is always working his ass off to bring Chinese and US and American companies to invest in gujarat and bring FDI to gujarat. why is BJP even complaining? I seriously dont get the politics of this country -_-

The sinister side in me has come up with the following reason for supporting Mom&Pop stores for these political lowlifes. They are used to having these small shops pay for their political campaign and support low level (cops and city tax officials) corruption. When the big guys get into retail they square of the deal with the big players (high level bosses) and would not succumb to low level black mail. Currently high level Kangress bosses have been bought out by the biggies and naturally the others feel left out.

India's motto should be the following: we welcome competitions by one and all in a level playing field and good luck but eventually India's Marwari/Sindhi/Patel/Baniya/Chettiar/Nadar combine will trump you all. e.g. world steel by Mittal.

FDI in retail: Farmer bodies throw their weight behind retail FDI

Most farmers, however, want the government to go a step further and make it mandatory for retailers to buy 75% of their produce directly from farmers, bypassing the restrictive 'mandi' auction system.

"Traders and middlemen are sucking our blood. But no political party is talking about our interest because we are not organised like labour unions, nor have deep pockets like traders,"


Farmer leaders say the stranglehold of middlemen and traders is at the root of rural poverty and India's food inflation.

He said the mandi system does not favour farmers because they lose 5% of the value in transportation, 10% in broker commission and 10% in quality parameters. "Direct purchase by large retailers will solve this problem."

The thumb rule of price rise from a farmer to a consumer in perishables such as fruits and vegetables is 1:2:3:4, said S Baskar Reddy, joint director (agriculture & rural development) at Ficci, an industry body. What a farmer sells for 1 is sold at the mandi at 2, which becomes 3 at the mandi at the consumption centre and 4 when it reaches the consumer through a retailer.

Farmers near urban areas are already finding ways to circumvent the mandi system and reach the consumer directly. For instance, 23-year-old farmer S Chandrasekhar drives 10 km every Sunday to sell fresh vegetables to joggers and walkers on Chennai's Besant Nagar beach.

http://economictimes.indiatimes.com/news/economy/agriculture/fdi-in-retail-farmer-bodies-throw-their-weight-behind-retail-fdi/articleshow/10939054.cms

Now, someone tell me why ,Reliance Fresh, More, Mega Mart, Big Bazaar ,Spencers etc couln't attempt to bypass traders and link farmers with Consumers? They too have access to big money,technology and management capacity?

Do we need to have foreigners here to set things in order and do a good job of it? Are we destined to remain only as a Consumer and will not participate in development?

Do we need westeners to clean up our mess from garbage cleaning ,retail to transport,science and technology?

Why then should India remain a Sovereign Country?

Why we do not have the spirit and determination to say "We can do it"?

Look at these gems of intelligence that the internet commies keep spreading. I saw someone complaining that "They will repatriate their profits back to their home nations". Cool, so kick out Accenture, IBM, Microsoft - everyone. Kick out citibank, Vodafone.. let us go back to the licence Raj days and wallow in our own filth and poverty. :bash:

exactly

companies repatriate profit

big shocker right there. :lol:


even single brand retail like Apple and Ikea etc who nobody seems to mind, are going to bring their profits home to USA/Sweden respectively. India is in no position to complain about repatriation considering we get lot of money though remittances.


sometimes i feel the west should ban Indians from working in the west and ban our IT industry from plying in a tit for tat tactic. Play hardball. It will actually be good for India and save us from these dumb populist measures.

Now, someone tell me why ,Reliance Fresh, More, Mega Mart, Big Bazaar ,Spencers etc couln't attempt to bypass traders and link farmers with Consumers? They too have access to big money,technology and management capacity?

Do we need to have foreigners here to set things in order and do a good job of it? Are we destined to remain only as a Consumer and will not participate in development?

Do we need westeners to clean up our mess from garbage cleaning ,retail to transport,science and technology?

Why then should India remain a Sovereign Country?

Why we do not have the spirit and determination to say "We can do it"?


what makes you think they wont be successful even after the big people come? The reason they have not done it till now is cause they are babies and dont have the capital. Big Bazzar for eg has 210 stores. Which is just too small. You need 1000s of branches to make an impact.

Nationally you need about 10 major retailors with more than 1000 branches.


Who knows they might out think their bigger rivals. Happened in a few countries where the big chains could not hack it. In Germany its Aldi and Lidl, no frills discounters who crushed the big guns.


The point is , its about time the local vendors big or small are put to competition. If they win thats fantastic. But you cant hide behind barriers.


Test yourself against the best....


Secondly in mutli brand retail i think its FDI is 51%, which means the big guns will partner with Panteloons big bazzar etc.

Looks like PM is standing firm on the FDI. We need the government to show determined stance like this. I just wonder, if something like multi=brand retail can invoke such inappropriate and adverse reactions like the traders - what hope can we have for implementing something as crucial but even more controversial as Labor reforms?

The congress realises food inflation in double digits = vote loss.

they see this (rightly or wrongly) as a way to bring that down to reasonable levels like 5%

seriously the people who think that traders will loose out are blind, they should know that 53 cities are been allowed and if they are unsuccessful then govt. will not allow further FDI(that is 100% in Multi-Brand) and it will remain till 1 million + cities, IMO seriously if they fail in anyway then Indians will loose more than angrezz...

what next your against global trade?

Boss before going on a long posting and making useless comparisons(Non realted) make a search on how many countires including Japan and America have put up barriers and excluded whole sectors (Agriculture specifically) to foreign investment. There is a purpose for doing so and that is they know that they will be swamped by foreign imports and hence it is not opened to foreign investment.

Bottom line: Every Country acts in its own interest to particularly protect/shield off sectors which are vulnerable to foreign predatory competition.

Now, someone tell me why ,Reliance Fresh, More, Mega Mart, Big Bazaar ,Spencers etc couln't attempt to bypass traders and link farmers with Consumers? They too have access to big money,technology and management capacity?

They are already doing it. However, mainly due to money the operations has not scaled up quickly. I don't know about technology either.
There is another issue: Indian infrastructure is lagging. When the big guys move in then there is tremendous pressure to upgrade. They might pump in money for such investments besides retail.


Do we need to have foreigners here to set things in order and do a good job of it? Are we destined to remain only as a Consumer and will not participate in development?

The simple answer is today's world is highly interconnected and gone are the days of single country doing it all. As long as we elect the right people who can discern development from colonization then things are just fine. India is already participating in IT dev and other high tech areas. So it is not one way and you need to give it a rest.


Do we need westeners to clean up our mess from garbage cleaning ,retail to transport,science and technology?

Why then should India remain a Sovereign Country?

Why we do not have the spirit and determination to say "We can do it"?

Nice cliches, but we are in execution phase, which means getting the job done. Right now, we are in learning/absorption mode. Over time things will change.

We may be able to come full circle with the retail business but with better efficiency, distribution, logistics, cleanliness. I am talking about a chain in the US called Wholefoods. What started as 1 shop in Texas has grown to over 350 outlets with turnover of $9Billion per year. Wholefoods simple premise was organically grown food by local farmers delivered to end consumers in a guaranteed, clean environment. A fish caught in Alaska by a single fisherman who uses good old fashion bait and string, not huge nets, is delivered fresh to a consumer in Chicago for example within a day or so. Or organically grown tomatoes, fruits grown by local farmers end up in wholefoods. Even the products on shelf are very strictly monitored for content, i.e. you would not find Coke or Pepsi stocked on its shelves. Eventually, for India a model like Wholefoods is needed. There would still be room for other models but in the long run products and services by local farmers who adhere to good sound farming principles are encouraged to deliver quality products to end consumers with very little middleman involvement. They however benefit by modern freezer storage, modern delivery (including by aircraft if needed), modern clean stores that preserve the goodness of the product for some time until the consumer picks it up, modern IT practices of balancing supply with demand, etc.

Boss before going on a long posting and making useless comparisons(Non realted) make a search on how many countires including Japan and America have put up barriers and excluded whole sectors (Agriculture specifically) to foreign investment. There is a purpose for doing so and that is they know that they will be swamped by foreign imports and hence it is not opened to foreign investment.

Bottom line: Every Country acts in its own interest to particularly protect/shield off sectors which are vulnerable to foreign predatory competition.

Yes thats what pisses me off about the neo con/ US elites espousel of free trade and 'the markets'
They have subsidised agriculture sector.
And now of course a subsidised banking sector.
Indias problem has been , and still is, a misunderstanding of how to maximise the free/protected balance for its own interests.
It should be looking very closely at whats the asean countries have done.
But it is opening up and change is happening

Boss before going on a long posting and making useless comparisons(Non realted) make a search on how many countires including Japan and America have put up barriers and excluded whole sectors (Agriculture specifically) to foreign investment. There is a purpose for doing so and that is they know that they will be swamped by foreign imports and hence it is not opened to foreign investment.

Bottom line: Every Country acts in its own interest to particularly protect/shield off sectors which are vulnerable to foreign predatory competition.

and india too has restriction on agriculture, mining, aviation and too many sectors to mention. Nobody is telling you not to do a tit for tat and not subsidies Indian agriculutre. Hell India even has restrictions on conversion of its currency.


USA signed the NAFTA which was heavily against their manufacturing sector.


If anything picking one sector which contributes less than 2% of the American GDP and using it as an example of how USA is supposedly protecting its interests is not a good argument.


The fact is India holds a big trade surplus with the USA. A gap which is widening year on year. The USA hold a large trade deficit with the most of the world.


If they would have protected their interests, i can assure you they would have blocked access to their markets a long time ago.

Yes thats what pisses me off about the neo con/ US elites espousel of free trade and 'the markets'
They have subsidised agriculture sector.
And now of course a subsidised banking sector.
Indias problem has been , and still is, a misunderstanding of how to maximise the free/protected balance for its own interests.
It should be looking very closely at whats the asean countries have done.
But it is opening up and change is happening

manipulating their currency?


PS most ASEAN countries have opened their retail markets to global retail giants. Case in point the most successful of them Thailand and Malaysia.

Yep.
Good posts above

They too have access to big money,technology and management capacity?



How did you come to this conclusion.They dont have any of these three.

Money - They are highly leveraged (high debt) that Subiksha and Vishal megamart already went bust. All the others are still not in a healthy position.

Technology- definitely not. They are struggling. Excpet hypercity I still could not find a single store, which could give vegetables atleast 10% fresh as the outside market. And probably money is also a constraint to adopt better technology.

Management capacity- May be yes. But not an issue here.

Technology and capital are big constraints. Even the Indian companies are waiting for FDI to start JVs to get capital and to learn better technology

Reliance Fresh was the one with lots of money to make it big (1000 plus stores)

I think they failed on the management and technology side of it.


but Reliance will make a good silent partner for a foreign company. they are sitting on $25 billion of cash reserves (Mukesh) IMO if they roll out an everything under one roof brand with a bank within the premise of the retail thing it will be awesome.

In the west when i was in london, retailors have branched into banking as well.


As we all know the traders moaned like no tomorrow even with reliance fresh. So rather than not wanting foreign retailors these people dont want competition.

FDI has been put on hold

disgusting

simply disgusting.


Indian growth will collapse without reform.

^^ The political opportunism by the BJP is simply disgusting. I can forgive all the retarded political parties like SP, Left, etc., but I cannot forgive the BJP, since most of us actually had hopes from them, as a center-right economically progressive party.

I'm not forgetting this.

^
ditto.

So basically we can forget about any reforms.


no fdi in aviation.

no labor reform

no reform in agriculture

the worse thing about this is the way in which this was handled. Now nobody in their right mind will want to come in India cause of the gov flip flops on decisions. This has big ramifications all across the board.



On one hand we blame the congress for not passing reforms. On the other when they do they get opposed by everybody for the sake of it.


Enjoy your food inflation india. Thats all you will ever get.

screw the BJP and other oppurtuistic political parties, they are holding the nation back.

mutli brand retail is dead.

I hope this does not impact/deter single brand retailers like Ikea Starbucks etc.


If i was the boss of Starbucks, i would personally wait a good 2-3 years after the law is passed to see if there are no repeals.

- i think Govt would have gone ahead regardless of BJP. Its Mamata Banerjee who tanked it.
Odd how a state that has managed to flounder its fortunes over 5 decades, becoming an industrial graveyard is damning India's growth story!!!

This is such a myopic politics - Coalition politics at its worst!!
Bravo Mamata banerjee - India loses!!

Is the move actually removed then? did a bit of searching and most news articles say that the move ahs been scraped and the rest say otherwise?

This is such a piss take the reform would have done wonders for the economy.

I would have called her Mamata Bonner-jee but i look at his policies and mu hard on shrinks away

so unhappy with this.

I agree, west bengal has a socialist and populist mindset which has plauged the state for far too long and has always played a part in hurting the larger national economy.

I hope she dies tonight

----

i can't believe how BJP has done this, if they would have gone for the voting then surely govt. would have fell, can't believe mamata did this, if she was so against it then she had an option not to bring to his state but why blackmail the centre?

this country will burn in flames with such political parties and coalition govt., no reform no parliament work... nothing i would short sell pantaloon retail on monday... this is just so frustrating... :bash:

well they did the reforms in 91 when every thing stagnated and there was BOP crisis. the crisis is not here yet that's why these dumb fuck politicians can do what they want. times like these democracy is bad.

Retail giants like Tesco, Carrefour, Walmart, Ikea, etc will have to make massive investments in logistics, cold chain logistics, warehousing, transport, training etc before a store opens. They practically have to build the infrastucture from scratch! Dont know the current state of infrastructure of domestic retail giants but given the size of India it will take years to create the infrastructure required to support the stores.

It took years & years for retail giants like Tesco, Asda (Walmart), Sainsbury's, etc in the UK to be where they are today. I dont think they will completely take over the retail market overnight.

I have changed my mind about FDI in retail as I think it would be a great thing in-terms of bringing more choice, competition, jobs, drive prices & inflation down, improve infrastructure, modernisation as well as creating more wealth & opportunities for Indian farmers.

There is massive opportunity & prospects for the Indian retail industry just as other sectors of the economy where opened up to FDI & reaped in the benefits like the Insurance/Assurance markets, Cars Industry, Information Techology etc.

what i dont get about mamta bonner-jee is that why is she blocking investment in other states?

she wants to implement populist policies and wants her state to stay stagnant then its upto her.

if states like Maharashtra and Delhi want to go through with this, why is she putting the spanner in the works?



IMO the time has come for the states to be given more power. They should be able to set their own FDI criteria for different sectors.


Enough of control from the centre. Its holding back states who want to implement more positive things.

If she does not want it, then keep it out of WB. why screwing other forward looking people.

If she does not want it, then keep it out of WB. why screwing other forward looking people.

exactly

Extremely frustrating!!

I think the govt missed the trick in marketing this issue. If govt had really marketed it saying it would bring down food inflation and help the farmers immensely, I think the opposition would have been lesser. Just watched the 'Big Fight' in NDTV where FDI in retail got unanimous support from the farmers and farmer association heads who came on the show.

Seriously I am soo angry with BJP. Left, I can understand.. they have always been opposed to anything Western. But, BJP opposing purely for petty political gains!! :bash:

BJP is shooting itself in its foot.. Should lose the middle class support if it continues like this!

BJP is a "Baniya" party, everybody knows that

If she does not want it, then keep it out of WB. why screwing other forward looking people.

Its not as if only Mamata (or WB) is blocking it. The CMs of KA, TN, UP, BR have opposed it. In fact only HR, MH, RJ, PB and OR have agreed to it.

even GJ was in support but the "high command" ordered to be against it..

but Reliance will make a good silent partner for a foreign company. they are sitting on $25 billion of cash reserves (Mukesh) IMO if they roll out an everything under one roof brand with a bank within the premise of the retail thing it will be awesome.

In the west when i was in london, retailors have branched into banking as well.


.

Retailers entering into banking? That will not/should not happen. Thanks to RBI, we have a robust banking system. Many industrial houses have applied for banking license, but RBI is very reluctant to give banking license to the industrial houses. These industrial houses will lend a lot to their own ecosystem (venodrs/delaers/contractors etc) and hence will be vulnerable to the cylces of those industries. Though RBI has checks for group concentration, sector exposure etc, it is not very difficult to do it indirectly through structured finance. Non-deposit taking NBFC may be okay to an extent. Our banking system is pretty robust compared to most of the other countries and should not be compromised in any way.

And IMO, single brand retail will sail through, as it is a non-issue. Most of them will be fashion brands and western food chains.

Retailers entering into banking? That will not/should not happen. Thanks to RBI, we have a robust banking system. Many industrial houses have applied for banking license, but RBI is very reluctant to give banking license to the industrial houses. These industrial houses will lend a lot to their own ecosystem (venodrs/delaers/contractors etc) and hence will be vulnerable to the cylces of those industries. Though RBI has checks for group concentration, sector exposure etc, it is not very difficult to do it indirectly through structured finance. Non-deposit taking NBFC may be okay to an extent. Our banking system is pretty robust compared to most of the other countries and should not be compromised in any way.

And IMO, single brand retail will sail through, as it is a non-issue. Most of them will be fashion brands and western food chains.

yup

they have entered banking in the UK atleast and yes in Japan the same thing happened when they did lend to their ecosystem as low rates. aka a Mitsubishi bank.

However,

I think Reliance Industries or even a Tata are just too diversified to be exposed to one sector.

If for eg Reliance cracks the retail market it will probably be as big in retail + banking + oil and gas + textiles (polyester) , thats a diversified pot.


More than ecosystems, so long as RBI ensures a 50% equity ratio for the banks we should be fine. Lets face it our state banks do have a lot of bad loans due to lending for social causes.



If i was ambani i would buy a controlling stake in a big western retailer like Tesco. Then use their expertise to expand in India. that way no issue of FDI rules.

they don't have money to buy tesco, in fact RIL's retail business has not been in profit ever since inception, its badly managed i must say. And recently they brought china's walmart chief to operate their retail chain

thats why i asked the question about when it'll become law.
It was only passed by the cabinet.
It may have to go to a house vote .
Dunno what'll happen if it does.

^^ it is an executive decision, if it goes for voting and the govt. looses then we will have mid term elections(?)....

Its all political motivated.

Bascially India doesn't want foreigners to steal the show hehe.

^^ it is an executive decision, if it goes for voting and the govt. looses then we will have mid term elections(?)....

Technically, it is Not necessary for govt to resign and hold a new election if govt loses this vote.. The govt is dismissed only if it fails a no confident motion or passing of a money bill.

Though, it would be a serious embarrassment to the govt and sometimes govt may resign on moral grounds.

it may prove to be too costly even for conresses deep pockets.
If they lose this little battle it kind of proves the self defeating mindset of those involved.

they don't have money to buy tesco, in fact RIL's retail business has not been in profit ever since inception, its badly managed i must say. And recently they brought china's walmart chief to operate their retail chain

enough to buy a controlling stake. (51% or 20 billion USD)

Thats the entire point of buying into a Tesco. Bring in expertise. Not one person but a lot of people.

^^ $20 billion=Rs 80,000 cr.. that is too much IMO

their cash balance is Rs 30,000 cr and debt is already at Rs 65,000 cr even if they do it by 50:50 debt equity then it will seriously damage RIL's balance sheet.

yup

they have entered banking in the UK atleast and yes in Japan the same thing happened when they did lend to their ecosystem as low rates. aka a Mitsubishi bank.

However,

I think Reliance Industries or even a Tata are just too diversified to be exposed to one sector.

If for eg Reliance cracks the retail market it will probably be as big in retail + banking + oil and gas + textiles (polyester) , thats a diversified pot.


More than ecosystems, so long as RBI ensures a 50% equity ratio for the banks we should be fine. Lets face it our state banks do have a lot of bad loans due to lending for social causes.



If i was ambani i would buy a controlling stake in a big western retailer like Tesco. Then use their expertise to expand in India. that way no issue of FDI rules.

Tesco is too big to acquire. They can acquire a small firm, if technology is the issue. But still the technology transfer may not be easy in acquisition as compared to JV as the local management has to understand and adapt the technology to local environment.

And banks are required to have just 9% capital (risk-weighted based on ratings). The business model of banks will be completelty meaningless with 50% equity as they have SLR and CRR. Usualy, equity range from 10 to 20% in banks.

Yes, Tata and Reliance are diversified, but other retailers a definite no in India atleast. All these diversified groups are eyeing a banking license for a long time now

What came out pretty clear is - Mamata Banerjee went through with this for purely populist reasons. She's trying to set herself as the champion of the oppressed - this is evident from the fact that SHE decided to go to the press with the news that a national policy like FDI in retail was on hold - and not the Centre!! Simply carrying forward her Singur image.

She wanted to be the first to gain political mileage. Centre announcing FDI retail was on hold would have dulled her salvo!!

This is purely a selfish, self centered populist move that has scuttled a huge reform measure. I can imagine how frustrated Manmohan Singh will be feeling. States cannot - SHOULD not be allowed to hijack national reform measures- especially states that have a terrible record of progress, development or reforms.

Sad that twice in a row over an ENTIRE DECADE, West Bengal politics has held the country hostage : first from the Left parties during UPA-1, now from Trinamool in UPA-2 - their socialistic/communist psyche have killed all semblance of National reforms!! I hate to single out a state like this - but 10 years is too long a time (considering our average prime years is only 40 years before we start becoming senile old men) - to be wasted!!!

^^
One expects this from Mamata and the left parties due to their ideology. What is the BJP's excuse? opposing for the sake of opposing it?

You're right. Considering BJP Itself had proposed retail reforms back in their day - this move on their part is wholly damning!!
BJP seems to be shooting itself in the foot. Sadly, All parties think that we're living in the 80s - in the dark ages of telecommunications and infrastructure - that people are taking in their garbage without much ado!!

BJP's discipline used to stand out before- now their chaotic bumbling in not havign any clear policy - is pushing them further out of reach of the masses. I just can't identify BJP on any clear plank - whether its pro-farmer, pro-trader, pro-middleclass or pro-industries!

Still - I still stand by that had Mamata banerjee not done her destructive step - all of BJP's shoutings and whinings wouldn't have done anything. Worst case, parliament paralysis - which everyone would blame on BJP - congress would still come out trumps in that!

^^
One expects this from Mamata and the left parties due to their ideology. What is the BJP's excuse? opposing for the sake of opposing it?

bingo.

and india too has restriction on agriculture, mining, aviation and too many sectors to mention. Nobody is telling you not to do a tit for tat and not subsidies Indian agriculutre. Hell India even has restrictions on conversion of its currency.

Precisely my point is being proven.If there are sectors which are not open to Foreign investment and then why Open Retail to FDI ?


USA signed the NAFTA which was heavily against their manufacturing sector.

NAFTA was almost desperate US /North American reaction to the fear of losing the Numer Uno economic power tag to a Unfied EU. US govt knew fully well that its Manufacturing sector had competition from China/East Asia and not Canada or Mexico. Indeed the facts have proved its judgement correct where the loss of manufacturing job to Mexico is less the 2% of that to China/East Asia.


If anything picking one sector which contributes less than 2% of the American GDP and using it as an example of how USA is supposedly protecting its interests is not a good argument.

The gdp contribution is not a calculus every time, it is the bargaining power of the respective industry lobby and the strategic nature of the indutry that comes into play. For eg if the US were to allow free trade in agriculture and open up its market (as Indeed the EU and Japan)then it will only be encouraging the strength of the third world contries in this sector to its detriment.It does not serve US's goals.


The fact is India holds a big trade surplus with the USA. A gap which is widening year on year. The USA hold a large trade deficit with the most of the world. If they would have protected their interests, i can assure you they would have blocked access to their markets a long time ago.

They are allowing it so long as it gets a unlimited access to cheap credit to live off on. USA is allowing the huge trade deficitis so long as the exporting countries are buying its teasury bills/bonds. In effect USA is exporting its recession to the rest of the world while having cheap funds to live off on.
Be informed that USA is allowing access to its market not because it is a champion of free trade but it is very much protecting its interest by creating a dependency of the rest of the world to its as a sustaining force for global trade.

Tesco is too big to acquire. They can acquire a small firm, if technology is the issue. But still the technology transfer may not be easy in acquisition as compared to JV as the local management has to understand and adapt the technology to local environment.

And banks are required to have just 9% capital (risk-weighted based on ratings). The business model of banks will be completelty meaningless with 50% equity as they have SLR and CRR. Usualy, equity range from 10 to 20% in banks.

Yes, Tata and Reliance are diversified, but other retailers a definite no in India atleast. All these diversified groups are eyeing a banking license for a long time now

last i checked tesco (does not have to be them) had $34-$40 billion market cap. Plus were earning well. Ambani is sitting on 25 billion and his companies are earning good money. Now obviously you cant expand without taking on some debt. He can certainly buy 51% and obviously use the dividend paid (which looks attractive) to shore up his debt.

Reliance can sell off other assets like gas fields to raise more capital. Its not as if he gives out good dividends.

While local management issue is right, they certainly can bring expertise in terms of logistics etc leaving the actual store performers to managers in India.
I am sure they can do an exchange program.


Also, on the last point, yes i guess 50% is too high. Dont know why i said it. Point being so long as a sufficient buffer is maintained and there is regulation by the RBI then i see no harm. Its not as if we are deregulating. (and we should not). India has plenty of highly diversified groups not connected to a single sector. The aditya birla group is another one which comes to mind. Also Anil Amabni group.


But if it has to be anything, i do hope Mukesh and the Tatas are the ones given entry into banking. With the EU India FTA I am sure that foreign banks are more than keen to set up shop in India.

^^
One expects this from Mamata and the left parties due to their ideology. What is the BJP's excuse? opposing for the sake of opposing it?

they have not got their due share by MNC's! :cheers:

Precisely my point is being proven.If there are sectors which are not open to Foreign investment and then why Open Retail to FDI ?



NAFTA was almost desperate US /North American reaction to the fear of losing the Numer Uno economic power tag to a Unfied EU. US govt knew fully well that its Manufacturing sector had competition from China/East Asia and not Canada or Mexico. Indeed the facts have proved its judgement correct where the loss of manufacturing job to Mexico is less the 2% of that to China/East Asia.



The gdp contribution is not a calculus every time, it is the bargaining power of the respective industry lobby and the strategic nature of the indutry that comes into play. For eg if the US were to allow free trade in agriculture and open up its market (as Indeed the EU and Japan)then it will only be encouraging the strength of the third world contries in this sector to its detriment.It does not serve US's goals.



They are allowing it so long as it gets a unlimited access to cheap credit to live off on. USA is allowing the huge trade deficitis so long as the exporting countries are buying its teasury bills/bonds. In effect USA is exporting its recession to the rest of the world while having cheap funds to live off on.
Be informed that USA is allowing access to its market not because it is a champion of free trade but it is very much protecting its interest by creating a dependency of the rest of the world to its as a sustaining force for global trade.


Try telling that to the poor farmer who blood-toils and slaves just to see 40% of his produce wasted in the FCI dominated trader-middleman supply chain nexus that has kept them from barely living as humans since the last 60 years : while you and I live off our dollars in the comforts of a first world country luxury - exposed to one blind man leading another blind man's universal adage "Walmart BAAAD!!"

BTW - This move by our illiterate politicians is because of that same adage. They've no clue about 21st century economics. Just one principle guides their warped ideology - MNC BAAAAD. Therefore Walmart BAAAD. Therefore oppose!!

Ever hear of frog-in-the-well? Our politicians have crossed even that boundary - this is what they've truly become!
http://www.marcdussault.com/blog/wp-content/uploads/2009/07/Donkey-1.jpg

Precisely my point is being proven.If there are sectors which are not open to Foreign investment and then why Open Retail to FDI ?

Its not been proven. The point is that you need to start deregulating your economy. Retail is being opened cause its supposedly a $450 billion sector as of now.

India is suffering from high food inflation with 40% of grains been wasted due to poor infra of warehouses and other issues. Its the common man who is suffering in something as critical as food.

Secondly you need to slowly open up all the sector. You remain a closed economy in these globalised times then you can kiss high growth goodbye.



NAFTA was almost desperate US /North American reaction to the fear of losing the Numer Uno economic power tag to a Unfied EU. US govt knew fully well that its Manufacturing sector had competition from China/East Asia and not Canada or Mexico. Indeed the facts have proved its judgement correct where the loss of manufacturing job to Mexico is less the 2% of that to China/East Asia.


This is the first time, i have heard this argument. Please do provide the source for this 2% loss. From what i read with NAFTA the american auto worker jobs went straight down to Mexico and central america


The gdp contribution is not a calculus every time, it is the bargaining power of the respective industry lobby and the strategic nature of the indutry that comes into play. For eg if the US were to allow free trade in agriculture and open up its market (as Indeed the EU and Japan)then it will only be encouraging the strength of the third world contries in this sector to its detriment.It does not serve US's goals

It does matter in this case. 2% of GDP is not a big indicator of how a nation thinks. You cant label an economy based on how one of the smallest sectors is protected.



They are allowing it so long as it gets a unlimited access to cheap credit to live off on. USA is allowing the huge trade deficitis so long as the exporting countries are buying its teasury bills/bonds. In effect USA is exporting its recession to the rest of the world while having cheap funds to live off on.
Be informed that USA is allowing access to its market not because it is a champion of free trade but it is very much protecting its interest by creating a dependency of the rest of the world to its as a sustaining force for global trade.


USA has been running a big trade deficit for about 25 years now. Basically since Ragen. During that time the % of people investing or holding the USD as a reserve currency has gone down. Secondly, nobody is forcing anybody to buy treasury bonds. People buy those bonds then its upto them.


and its not just the USA, countries like Canada UK and Australia are in the same mould as the USA.

I dont see the UK government blocking TATA from coming to British shores, do you? They view investment positively.

so they've put it on hold and now BJP & left are demanding a permanent rollback, so its now a definite no-go? I feel for Manmohan Singh, one of only a handful of honest intelligent literate politicians in India, maybe in another 10-20 years, when over 50% of politicians work for the common good and not their own agendas, will India truly progress.

Vicky - you have dealt with Walmart right?
You know it better , so does another guy on SSCI called SSUSA and myself.

Better not waste time telling our brothers about WM and big-chains. They want to breathe helium, so let them :)

Cheers
p2p4

Boss before going on a long posting and making useless comparisons(Non realted) make a search on how many countires including Japan and America have put up barriers and excluded whole sectors (Agriculture specifically) to foreign investment. There is a purpose for doing so and that is they know that they will be swamped by foreign imports and hence it is not opened to foreign investment.

Bottom line: Every Country acts in its own interest to particularly protect/shield off sectors which are vulnerable to foreign predatory competition.

So the BJP opposed this cuz Walmart is American or because it would boot the middle man out of the equation? What would be their stance on organized retail by Ambani or pantaloons or mahindra?

In Jalandhar, a sample of what Wal-Mart brings to the table
For more than a year, Wal-Mart has been operating a wholesale outlet in this northern city known for its fertile farms and hearty food. Local businessmen like Ravi Mahajan, whose family has had a wholesale general store in the narrow alleys of the Imam Nasir market for 40 years, say their sales have been cut in half as their customers — retail shopkeepers — stock up at Wal-Mart.

If the government eventually lets foreign firms expand beyond wholesaling to open retail stores, Mr. Mahajan said, many of his retail customers would be forced out of business, while squeezing out traders like himself who have long served as the crucial middleman in Indian commerce.

“We’ll be destroyed,” Mr. Mahajan said last week, minutes after he and dozens of other traders burned an effigy with a bloated belly and a crudely drawn face, meant to represent multinational marauders.

But Indian business is far from united in opposing foreign retailers.

Farmers like Avtar Singh Sidhu, who sells potatoes to PepsiCo for its Lays chips and has sold baby corn and other vegetables to Wal-Mart’s local partner, the Indian conglomerate Bharti, argues that foreign retailers will be a boon to India’s struggling agricultural sector. The multinationals, he said, will buy directly from farmers and pay better prices than local wholesalers.

Already, he said, PepsiCo is offering 6 rupees per kilo (or 11 cents) for his potatoes, while local traders offer only 3 rupees (6 cents). “We need more competition,” Mr. Sidhu said.

Policy makers are looking for ways to stimulate economic growth, which fell to an annual pace of 6.9 percent in the three months that ended in September. It was the first time India’s growth rate had fallen below 7 percent in two years.

The announcement by Mr. Singh’s administration on Nov. 24 called for allowing foreign companies like Wal-Mart to team up with Indian partners to open retail stores in metropolitan areas with more than one million people. Jalandhar has 2.1 million people.

Link (http://profit.ndtv.com/News/Article/in-jalandhar-a-sample-of-what-wal-mart-brings-to-the-table-293542?pfrom=home-topstories)

is jalandhar 1 million+ city?

Yes. Chandigarh also

At least the government will debate this in Parliament which it should have done in the first place.

FDI in Aviation is next!

BJP after UPA scams won the confidence of middle class but again they are doing a thing which will unable them not to win till at least 2019... it is finished.

At least the government will debate this in Parliament which it should have done in the first place.

FDI in Aviation is next!

if such topics are debated, then there is no need of govt. because all the executive decisions should go to parliament, no need of cabinet then.

FDI in retail: Aam bania is more powerful than the aam aadmi
Dominated by banias, small shopkeepers are notorious for cheating customers through adulteration and fiddled weighing scales. They are also notorious for evading sales tax and income tax. That's why the bania is widely despised (although it is wrong to tarnish all with the same brush).

Yet we have the astonishing spectacle of several political parties and state governments supporting the crorepati bania against foreign retailers, whose alleged crime is that they will lower prices so drastically as to wipe out small shopkeepers. If indeed, foreign retailers will reduce prices dramatically--a highly exaggerated hope---this would be a fabulous blessing for the aam admi, struggling with inflation. So, politicians who oppose foreign retailers are promoting the aam bania against the aam aadmi. This is all phrased in socialist rhetoric, but amounts to backing rich traders against poor consumers.

Why does this happen? Because politicians always woo vote banks and financiers. Baniasconstitute a highly organized vote bank (totaling 50 million in last week's bandh). They are also political financiers, and not of the BJP alone. That's why they are wooed even by supposed leftists.

In sum, the bania shopkeeper is powerful in all democracies. He uses small-man rhetoric to advance his interests, but, far from being weak and unorganized, is actually highly organized, whereas the consumer is not. The bania constitutes a vote bank, which the ordinary consumer does not. The bania is an important political donor, which the aam admi is not. For all these reasons, the aam bania repeatedly triumphs over the aam admi.

Link (http://economictimes.indiatimes.com/opinion/columnists/swaminathan-s-a-aiyar/FDI-in-retail-Aam-bania-is-more-powerful-than-the-aam-aadmi/articleshow/10977614.cms)

del

I think there are two issues that are not in doubt.
1. This will benefit the farmers,
2. This will badly affect the middlemen (who add no value in the first place).

What may be in doubt is whether and if this will affect the kirana stores that lie within a certain radius of potential sites for the big stores. By definition, i think this will amount to a very small %.

I am disgusted (and not remotely surprised) with the entire political class, who claim to champion the poor and the farmers in particular for opposing what would benefit the farmers and the consumers or the "aam aadmi"

However, I am still a bit confused about the cold chain argument. I completely understand its merits and the need for it. But can someone please explain, given their reasonable presence now, how is it that stores like big bazaar, reliance etc. have not been able to put these cold chain systems in place? Why have they failed to make a dent in those 40% food grains that get wasted that we are literally depending on people like Walmart and Tesco to fix this for us ?

It's not a question on the issue of FDI. I'm simply wondering why the Indian companies have failed to replicate (let alone innovate) cold storage solutions.

the reason is they don't have enough $$$$$

BJP has shot itself in the foot big time, I expect the Congress to go to the farmers in the next general elections (comprising over 60% of workforce) and yell how BJP scuttled their opportunity to almost double their income and paint them as evil, in addition to the FSB this will give congress a heavy advantage.

The emerging class urban Indians also recognize the need for high quality to multi brand retail store and by and large agree on FDI in retail will also see this as a backward step by BJP, overall - this will come back to haunt them in the near future.

exactly

BJP is dumb dumb dumb.

as is mamta bonner jee

Its not been proven. The point is that you need to start deregulating your economy.
Deregulating the economy is agreed to but not in sensitive sectors.Even a 1st year economics student knows regulating an economy is a bad idea. However distinction needs to be made for rampant foolhardy decisions.


India is suffering from high food inflation with 40% of grains been wasted due to poor infra of warehouses and other issues. Its the common man who is suffering in something as critical as food.

If India is suffering from food inflation with 40% grains wasted due to poor infrstructure and other issues then you should also know that it is due to the Monopoly of the FCI and that the GOI is resposnsible for it.Common man is suffering because GOI is not opening the sector to (half baked measures) to Private sector. Why should the Retail be opened to FDI for this? The Indian Pvt sector corporations would be more then willing to set up the supply chain/cold storage logistics chain.


Secondly you need to slowly open up all the sector. You remain a closed economy in these globalised times then you can kiss high growth goodbye.

Yes you need to open up to foreign investment .Thats why the single Brand retails has been opened up for 100% FDI. But Multi Brand retail for FDI should be a strict no no.


You remain a closed economy in these globalised times then you can kiss high growth goodbye.

India is a approx $2 Trillion economy. China has reached the peak of its growth cycle and has many industries with surplus production capacities.In the so called globalised time can you name one single country in this economically saturated world which offers growth potential as India? The world has no option but come and be a part of its further growth but strictly on India's term.


Retail is being opened cause its supposedly a $450 billion sector as of now.
Precisely why open up a readymade sector for others to take unlimited benefits off? Small Indian traders/businessmen/Corporates have diligently grown up this sector not to offer it on a platter to Retails Giants from outside who will just indulge in predatory practices.


This is the first time, i have heard this argument. Please do provide the source for this 2% loss. From what i read with NAFTA the american auto worker jobs went straight down to Mexico and central america

Its total manufacturing jobs lost in the US due to competition fron China vis-a-vis Mexico and other NAFTA areas.
Even for the auto sector that you have mentioned check the facts off late the American auto production has increased - New plants by Hyundai in Alabama, Honda in Ohio, Toyota in Kentucky. Whereas going by what you have mentioned they should have all opted for Mexico.
Fact is if your market is big enough (Like India's retail sector is) the Foreign MNC's will come on your terms.(Check todays news report that Wal-Mart was happy to come in India at 26 to 49% but the CON-grass govt is willing to open it to 51% )



It does matter in this case. 2% of GDP is not a big indicator of how a nation thinks. You cant label an economy based on how one of the smallest sectors is protected.

Check my reply above.You totally lost out on what is implied about the strategic nature of a particular industry.



USA has been running a big trade deficit for about 25 years now. Basically since Ragen. During that time the % of people investing or holding the USD as a reserve currency has gone down. and its not just the USA, countries like Canada UK and Australia are in the same mould as the USA.


Boss check your facts. When Bill Clinton was replaced by George Bush Jr in 2001, the US had record surplus of $600 Billion. Check that. Canada is also now a Surplus economy since hitting the skids in 1993-1994.
% wise if you go will not always give you a true picture.
Your implication that US$ is less attracive as % of people holding $ as a reserve currency has gone down, then what importance will you give to the fact that the total amount of goods being traded on the US $ currency has gone up exponentially? (Due to the increased trade volume)
What other alternative is there? China and some muslim countries wanted to make euro as reserve alternative. Know what hapened to the Euro Zone since?


Secondly, nobody is forcing anybody to buy treasury bonds. People buy those bonds then its upto them.[/url]

Dont kid yourself. If China/Korea or other countries dont buy US Bonds then who is going to buy the Goods from them? Is there a single country in the world whose market can absorb the merchandise of these conutries?
These countries are buying the Bonds so US can finance its imports. US has locked these countires in a catch 22 situation where if the goods manufactured are not sold there will be massive unemployment in these countires.

[QUOTE=MeMumbaikar;86349346]
I dont see the UK government blocking TATA from coming to British shores, do you? They view investment positively.

Yes they allow TATA from coming in those Sectors/Industry where it is not a negative for them.
TATA was allowed to invest in JLR as there was not a single UK based country which was willing to touch it even with a barge pole.
Also remember UK does not allow foreign companies to enter in some of their sectors (Defence and Agriculture).The Defence sector companies in the UK have cross holdings from other companies at less the 50% share.

Deregulating the economy is agreed to but not in sensitive sectors.Even a 1st year economics student knows regulating an economy is a bad idea. However distinction needs to be made for rampant foolhardy decisions.



If India is suffering from food inflation with 40% grains wasted due to poor infrstructure and other issues then you should also know that it is due to the Monopoly of the FCI and that the GOI is resposnsible for it.Common man is suffering because GOI is not opening the sector to (half baked measures) to Private sector. Why should the Retail be opened to FDI for this? The Indian Pvt sector corporations would be more then willing to set up the supply chain/cold storage logistics chain.



Yes you need to open up to foreign investment .Thats why the single Brand retails has been opened up for 100% FDI. But Multi Brand retail for FDI should be a strict no no.



India is a approx $2 Trillion economy. China has reached the peak of its growth cycle and has many industries with surplus production capacities.In the so called globalised time can you name one single country in this economically saturated world which offers growth potential as India? The world has no option but come and be a part of its further growth but strictly on India's term.


Precisely why open up a readymade sector for others to take unlimited benefits off? Small Indian traders/businessmen/Corporates have diligently grown up this sector not to offer it on a platter to Retails Giants from outside who will just indulge in predatory practices.



Its total manufacturing jobs lost in the US due to competition fron China vis-a-vis Mexico and other NAFTA areas.
Even for the auto sector that you have mentioned check the facts off late the American auto production has increased - New plants by Hyundai in Alabama, Honda in Ohio, Toyota in Kentucky. Whereas going by what you have mentioned they should have all opted for Mexico.
Fact is if your market is big enough (Like India's retail sector is) the Foreign MNC's will come on your terms.(Check todays news report that Wal-Mart was happy to come in India at 26 to 49% but the CON-grass govt is willing to open it to 51% )




Check my reply above.You totally lost out on what is implied about the strategic nature of a particular industry.




Boss check your facts. When Bill Clinton was replaced by George Bush Jr in 2001, the US had record surplus of $600 Billion. Check that. Canada is also now a Surplus economy since hitting the skids in 1993-1994.
% wise if you go will not always give you a true picture.
Your implication that US$ is less attracive as % of people holding $ as a reserve currency has gone down, then what importance will you give to the fact that the total amount of goods being traded on the US $ currency has gone up exponentially? (Due to the increased trade volume)
What other alternative is there? China and some muslim countries wanted to make euro as reserve alternative. Know what hapened to the Euro Zone since?

+1000 VICKY without any firm policy and the idiotic and fat ass govt that takes billions of years to make most obvious decisions, FDI will rip India off from the global economic power stage... Most of the revenue earned by these Foreign companies will go to their respective banks, which ofcourse is not in India... India will get a mere share of this revenue (about 40%)
Also, if companies like walmart that usually imports goods from china to minimize its cost does the same here... then we will be the next "Everything is MADE IN CHINA HERE " victim... China can potentially fuck us up on that... add to that our slow govt policy and you will get a perfect recipe of bankcrupting the country + losing NE and possible entire India to chinkis... I dont mind if we grow on 8% P.A , it is atleast some growth...


On the other hand, if walmart can promise to use MADE IN INDIA products only (which I highly doubt) , India's manufacturing Industry would boom , plus the money would remain in our country...

I personally believe, it is a retarded choice, yes I know countires like China have it, but they also have a fast and tough govt.. THAT THINKS FOR IT'S COUNTRY unlike our ITALIAN lady's govt. which will start taking action when everything would be burnt to ashes

Most of the revenue earned by these Foreign companies will go to their respective banks, which ofcourse is not in India... India will get a mere share of this revenue (about 40%)


:ohno:

This is a simple thing coming out from here.. Jo log FDI ko oppose kar rahe hain they dont either understand what is it or they dont want it for personal reasons..Personal reason is political reason here. Im not supporting or oppossing FDI; what i mean to say is even in future if ABC government brings in a proposal, irrespective of what it brings for the country the XYZ government will oppose it. means no one actually cares about our country in politics. Well they can f...ing see that our economy is gowing down but these fat ass bi..es just want some money in their a$$. I'm so over it, I was in india few months ago and asked my friend if we all school mates able to stand in our city elections and he said dont even dare think about it because you'll be attacked mentally and physically by the powerfull people.I'm ready to come back to India but if i know that move is right and i can donate my whole life for my country for this reason but i want support of people. ;(

They're ridiculing India on CNBC's squawk box here in the US (a very widely watched financial program ) on our flip-flops. :(
Unbelievable how a dumb illiterate politician like Mamata Banerjee can harm India's global image by her myopic populist policies. She's done great harm to us - both financially and psychologically!!!

So ? CNN isn't God. They're quite ridicule-worthy themselves.

CNBC MM-bhai -not CNN. CNBC is darned decent and impartial channel (notwithstanding the common man's disposition to brand ALL media channels as the spawns of satans). CNBC is still a quality channel not driven by political propaganda!!

And CNBC's rebuke is spot on - this time - we bloody well deserve it!

politically driven but at least it shows "news" :lol:

They're ridiculing India on CNBC's squawk box here in the US (a very widely watched financial program ) on our flip-flops. :(
Unbelievable how a dumb illiterate politician like Mamata Banerjee can harm India's global image by her myopic populist policies. She's done great harm to us - both financially and psychologically!!!


yeah

you cant blame them either. One day our gov basically says ok. Next day they put it on "hold". We all know what hold means. Its like the boy who cried wolf. When they do announce anything or a major policy, i think everybody will wait atleast for a few years before they actually start operations.


I called this a few posts back. This flip flopping is extremely bad for our image as a country.

Deregulating the economy is agreed to but not in sensitive sectors.Even a 1st year economics student knows regulating an economy is a bad idea. However distinction needs to be made for rampant foolhardy decisions.

Retail is not a sensitive sector. They have already deregulated non sensitive sectors.

Agri which employs a lot of people is a sensitive sector.



If India is suffering from food inflation with 40% grains wasted due to poor infrstructure and other issues then you should also know that it is due to the Monopoly of the FCI and that the GOI is resposnsible for it.Common man is suffering because GOI is not opening the sector to (half baked measures) to Private sector. Why should the Retail be opened to FDI for this? The Indian Pvt sector corporations would be more then willing to set up the supply chain/cold storage logistics chain.

Retail needs to be opened to FDI cause local players dont have enough money to make a dent.

You will need to spend billions on infra for it. The middle men cannot do that.


Yes you need to open up to foreign investment .Thats why the single Brand retails has been opened up for 100% FDI. But Multi Brand retail for FDI should be a strict no no.

Whats the difference between single brand and multi brand retail? Companies still are going to repatriate money back home.

Hell even the Lays you get in the baniya shops is basically taking money back home to PepsiCO in USA. Whats the point of blocking multiple brand retail if you are still going to purchase items from companies outside india?



India is a approx $2 Trillion economy. China has reached the peak of its growth cycle and has many industries with surplus production capacities.In the so called globalised time can you name one single country in this economically saturated world which offers growth potential as India? The world has no option but come and be a part of its further growth but strictly on India's term.


bull shit. India is facing a big balance of payments crisis. The difference between our exports and imports is now touching $140 billion. Our FDI is stuck at $30 billion. The books need to add up. If India was the only option the rupee would certainly not be falling, which it is as of now. You cannot afford to be arrogant.

Precisely why open up a readymade sector for others to take unlimited benefits off? Small Indian traders/businessmen/Corporates have diligently grown up this sector not to offer it on a platter to Retails Giants from outside who will just indulge in predatory practices.


Competition. Nobody said the global biggie's will succeed. The traders have not built jack. The Indian consumer has given them a monopolised market. If they are good they will compete with the Indian big firms and Foreign small firms.

Lets keep in mind the so called Small business wet its pants and protested and protested against Reliance Fresh. As i mentioned before its not foreign ot local. Small traders dont want competition.





Its total manufacturing jobs lost in the US due to competition fron China vis-a-vis Mexico and other NAFTA areas.
Even for the auto sector that you have mentioned check the facts off late the American auto production has increased - New plants by Hyundai in Alabama, Honda in Ohio, Toyota in Kentucky. Whereas going by what you have mentioned they should have all opted for Mexico.
Fact is if your market is big enough (Like India's retail sector is) the Foreign MNC's will come on your terms.(Check todays news report that Wal-Mart was happy to come in India at 26 to 49% but the CON-grass govt is willing to open it to 51% )

you provide the facts with links. Regardless of what the actual facts are, the USA lost more jobs to latin america. To china they lost maybe involuntarily. Like most of the world. To the Latin countries they jobs multiplied via NAFTA. America is one of the most open major economies in the world. They have been for a long time.



Boss check your facts. When Bill Clinton was replaced by George Bush Jr in 2001, the US had record surplus of $600 Billion. Check that. Canada is also now a Surplus economy since hitting the skids in 1993-1994.
% wise if you go will not always give you a true picture.
Your implication that US$ is less attracive as % of people holding $ as a reserve currency has gone down, then what importance will you give to the fact that the total amount of goods being traded on the US $ currency has gone up exponentially? (Due to the increased trade volume)
What other alternative is there? China and some muslim countries wanted to make euro as reserve alternative. Know what hapened to the Euro Zone since?


Wrong.

Trade Balance of the USA Year on Year has been negative for nearly 30 years now. The surplus your talking about is a budget surplus ie the difference in what the US gov raised in taxes etc and what it spends/obligations


http://upload.wikimedia.org/wikipedia/commons/8/80/US_Trade_Balance_1980_2010.svg

Now the budget surplus


http://articles.cnn.com/2000-09-27/politics/clinton.surplus_1_budget-surplus-national-debt-fiscal-discipline?_s=PM:ALLPOLITICS


Lets face it the USA has always had a negative trade balance and CAD. It just minimised under Clinton.

reply continued in another post.

Dont kid yourself. If China/Korea or other countries dont buy US Bonds then who is going to buy the Goods from them? Is there a single country in the world whose market can absorb the merchandise of these conutries?
These countries are buying the Bonds so US can finance its imports. US has locked these countires in a catch 22 situation where if the goods manufactured are not sold there will be massive unemployment in these countires.

Actually the Eurozone is the largest trading partner of China (30% of chinese exports compared to 20% for the USA) and Japan and South korea. The chinese export more goods to Europe than they do to the USA. It is a bigger economic entity. Some $19 trillion compared to $14 trillion for the USA.

The decline in the dollar can be seen through its use of the shadow index on what who holds.

http://upload.wikimedia.org/wikipedia/commons/1/12/Reserve_currencies.svg


that itself tells you the world has been turning off US T bills for a long time.
Secondly, has always been an option to Tbills. That is gold which more and more people are snapping up.

Exports as a % of GDP for China has fallen to about 25%. Its dropped from 50% in 2008.

Its a very common assumption that the USA is the worlds largest trading entity when in reality its the eurozone.




Yes they allow TATA from coming in those Sectors/Industry where it is not a negative for them.
TATA was allowed to invest in JLR as there was not a single UK based country which was willing to touch it even with a barge pole.
Also remember UK does not allow foreign companies to enter in some of their sectors (Defence and Agriculture).The Defence sector companies in the UK have cross holdings from other companies at less the 50% share.

actually a British an US /Canadian hedge fund wanted to purchase them. The British gov thought TATA was the better offer. Thats how they do business.

the British firm was

http://en.wikipedia.org/wiki/Alchemy_Partners

So lets give this UK based company not touching with a barge pole a rest. There were plenty of hedge funds and equity groups from the UK and USA who wanted to purchase the car makers.


TATA even purchased Corus , a steel-maker when there was interest from British firms but TATA was the better option.



and secondly National security is a no no for any country. As is the case for India.

However the british government do allow small investors to purchase their defence companies. I can if i want buy BAE systems the leading company of the UK in defence. Something which i cant do in India which has no company listed which is directly in the defence sector as its main contributor.

^^ Excellent analysis Mumbaikar-bhai.
I especially strongly concur with this one :

bull shit. India is facing a big balance of payments crisis. The difference between our exports and imports is now touching $140 billion. Our FDI is stuck at $30 billion. The books need to add up. If India was the only option the rupee would certainly not be falling, which it is as of now. You cannot afford to be arrogant.

What we have in India is abundance of false pride. Politicians think we're sitting on an unlimited pile of cash that we can blatantly keep doling out subsidies and decide at our convenience which FDI we want and dont want and that our position in the global trade is infallible! We need humility and leaders with both economic and political acumen urgently in our political system.
What we have are bonafide frog-in-the-wells like Mamata Banerjee

exactly

enough of this false pride, America deserves to have pride. They have earned it. Not us.

Typical of this is this that chump Montek Singh. Rather than encouraging NRI's to invest in India his pearl of wisdom was "invest in India only if it benefits you". What the hell kind of attitude is that? Person in his position needs to be a salesman for India Inc. Its typical of the small baniya attitude "lena hai to le lo"

especially now with the rupee in the shits as it is. Growth was just 6.9 in the last quarter. You need to bridge the gap. FDI in retail can bring easily about $20 billion a year for the next 10 years atleast. Cause these companies are in this for the long term. They will use huge % of their potential profits to expand and build infra. All this issue about taking profits out of India does not make sense for atleast 10 years cause it will take a long time for even them to establish some level of logistics.

Maybe there's a ray of hope? Govt says only suspension and not a rollback

qqvjW0GUey8&feature=relmfu

Retail is not a sensitive sector. They have already deregulated non sensitive sectors.

Agri which employs a lot of people is a sensitive sector.

Retail sector has tens of millions of small shop keepers ( and hundreds of millions of their family members) dependent on it. If this is not Sensitive sector then what is?



Retail needs to be opened to FDI cause local players dont have enough money to make a dent.
You will need to spend billions on infra for it. The middle men cannot do that.



You kidding me? Reliance, Birla and TATA not having money to invest in Retail? 10 Yrs back who would have thought Reliance would reach a 1000 stores within Six years of starting operations? Give the INIDAN BIGGIES some time no need to bring in outsiders for it.
Nobody said anything about Indian middlemen so where did that come from?


Whats the difference between single brand and multi brand retail? Companies still are going to repatriate money back home.


Hell even the Lays you get in the baniya shops is basically taking money back home to PepsiCO in USA. Whats the point of blocking multiple brand retail if you are still going to purchase items from companies outside india?

There is a world of difference between Single Brand and Multi Brand in that the single brand retails tend to be of higher end merchandise which do not have any worthwhile Indian competitor Like GAP, IKEA etc (Not threatening the millions of shop keepers which are directly targetted by Multi Brand retailers selling the daily sustainance type of goods).

PEPSICO example you gave is not a good example as it is spending money to further ramp up operations in India and setting up more plants. Google info about the Farms it has invested in Punjab and Haryana.




bull shit. India is facing a big balance of payments crisis. The difference between our exports and imports is now touching $140 billion. Our FDI is stuck at $30 billion. The books need to add up. If India was the only option the rupee would certainly not be falling, which it is as of now. You cannot afford to be arrogant.

Oh really!!!! Come on how much FDI do you think is going to be brought in by the opening of retail sector which will make a worthwhile contribution to staving of the BOP crisis?
FDI stuck at 30 Billion figure does not mean offering lucrative and easy sectors on a platter.
The Potential for FDI investment in infrastructure sector is bigger by atleast a factor of 10 as compared to the retail . How come the foreign investors are not investing even after the GOI has opened up the infrastructure sector for investment worth hundreds of billions of Dollars?
That is because they want a assured stream of revenue for their investment which only multi brand retail guarantees.Investing in infrastructure does not guarantee returns (if at all after a long gestation period) that the quick returns Retail sector does.
The Big-Box retail operations has just a one time setting up cost and after that it is a vertiable ATM machine for the retailers to live off on.
The Rupee is falling not because of balance of payments issue(If that was the case then how do you explain US $ going up?) There are a host of global economic issues contributing to it.



Lets keep in mind the so called Small business wet its pants and protested and protested against Reliance Fresh. As i mentioned before its not foreign ot local. Small traders dont want competition.

The protests against Reliance were to a large measure political stunts (Mayawati in UP and the Commie cartoons from Bengal). Reliance has Pan India presence and how come the small businessmen did not protest everywhere?



you provide the facts with links. Regardless of what the actual facts are, the USA lost more jobs to latin america. To china they lost maybe involuntarily. Like most of the world. To the Latin countries they jobs multiplied via NAFTA. America is one of the most open major economies in the world. They have been for a long time.

Give the policy makers of the US some credit , USA did not open up its economy because it was crazy for NAFTA but because it wilfully abdicated some sectors where it knew it was foolhardy to try to compete with low cost producing companies. It did not lost more jobs involuntarily to china but it is a concisous decision to import from it more as the cost of Production in the US can certainly not match that in China.

It does not mean that it goes crazy in opening up its Sensitive/Strategic sector to China. Just recall how US did not allow the Chinese State company to buy/aquire one of its Oil and Gas company.

I have been going through the posts here and everybody is alluding to the fact that i am advocating a closed economy.Its not that.
what is reqd is a judicious and concious policy to opening up sectors(Where expertise or investment is reqd and cannot be produced by Indian entities).

The FDI will come in only for sectors where the investors will get easy returns. I bet if India were to open up the Defence and Multi Brand retails sector you will have a lot of companies falling over themselves to come in (How much total FDI will come and how much difference it will make to our precarious BOP position that is not hard to say).

That the Investors want to pick and choose is evident from their so far lack lustre efforts in investing in the Cash and Carry and Single Brand retail sector only reinforces the point that if foreign entities want to cherry pick sectors/options for their investments , it does not mean we just say "Yes Sir" and comply.

Lastly the (CON)grass govt is wanting to open up the muti brand retail sector not because it had a moment of epiphany or is doing it for the good of the country.On the contrary it is doing so as its cash coffers are empty and it wants means of funds to waste on electorate appeasing and corruption promoting subsidies. Just check the rediif report in the previous pages.

^^ Been 20 years since we opened up. FDI in retail is being debated for the last 14 years.
How long does a nation need to debate over the judicious and concious policy ?

Ram went into exile, strategized and won a huge battle, crossed the sea into another nation and killed Ravan, saved Sita and came back to Ayodhya - on foot - in 14 years. Surely our egg-headed politicians could do a little better timewise in the Internet age?

no you know naa, we will burn ourselves but will not open a WALMART store!!!

don't know whether to laugh or cry :bash: :lol:

Retail FDI: Farmers body writes to PM, Biocon's Shaw supports (http://www.business-standard.com/india/news/retail-fdi-farmers-body-writes-to-pm-biocons-shaw-supports/152525/on)

Retail sector has tens of millions of small shop keepers ( and hundreds of millions of their family members) dependent on it. If this is not Sensitive sector then what is?

dont kid yourself. Hundreds of millions? Indian work force in total is something like 600 million. 10 million in them represents less than 2% of the work force. I doubt even if there are 10 million small shops. I read a report which said there are 40 million people dependent (like small children whos father owns a shop) on small retail. That 3% of the pop.Agriculture which employs some 300 million people now that is a sensitive sector. Hell forestry and fishing employs more people than small retail. What also about the needs of the farmers? You think the small retailers and middle men are doing justice to a much bigger group?

The is also no reason why these small traders cannot get jobs working for the big retailers. Just make a pact that small retailers have the option to be employed by the bigger ones.


You kidding me? Reliance, Birla and TATA not having money to invest in Retail? 10 Yrs back who would have thought Reliance would reach a 1000 stores within Six years of starting operations? Give the INIDAN BIGGIES some time no need to bring in outsiders for it.
Nobody said anything about Indian middlemen so where did that come from?


Reliance Fresh has flopped. Its making a loss. Much smaller big Bazzar is doing much better.

the entire point of 51% is to combine the know how of foreign with local giving the shot to the foreign one to raise equity etc.

Its not 100%. Which i oppose also.

Joint ventures meant foreigners could not take charge. In this case local bodies will work under the directions of foreign learning how to position a buiness. Atleast thats what GOI hopes.

they just raised the ratio from 50 before to 51 (a controlling stake)


There is a world of difference between Single Brand and Multi Brand in that the single brand retails tend to be of higher end merchandise which do not have any worthwhile Indian competitor Like GAP, IKEA etc (Not threatening the millions of shop keepers which are directly targetted by Multi Brand retailers selling the daily sustainance type of goods).

my friend even starbucks is single brand retail. Your not telling me that coffee is high end right? I can think of a million examples from Ben and Jerry's which used to rely on a partner or franchise owner in India or even McDonalds. Some companies were ok with it others were not. You can even get chains like JC Penny selling clothes at a discounted prices. It most certainly does not have to be high end.

even in your example, buying a stool from Ikea is not high end. Just saying.


PEPSICO example you gave is not a good example as it is spending money to further ramp up operations in India and setting up more plants. Google info about the Farms it has invested in Punjab and Haryana.

Its not just PepsiCo, its Coca Cola its Maruti Hyundai LG samsung applicances and anything foreign. Even these retailers will have to source food from the farms right? They have to source something from the country?


Oh really!!!! Come on how much FDI do you think is going to be brought in by the opening of retail sector which will make a worthwhile contribution to staving of the BOP crisis?
FDI stuck at 30 Billion figure does not mean offering lucrative and easy sectors on a platter.
The Potential for FDI investment in infrastructure sector is bigger by atleast a factor of 10 as compared to the retail . How come the foreign investors are not investing even after the GOI has opened up the infrastructure sector for investment worth hundreds of billions of Dollars?
That is because they want a assured stream of revenue for their investment which only multi brand retail guarantees.Investing in infrastructure does not guarantee returns (if at all after a long gestation period) that the quick returns Retail sector does.
The Big-Box retail operations has just a one time setting up cost and after that it is a vertiable ATM machine for the retailers to live off on.
The Rupee is falling not because of balance of payments issue(If that was the case then how do you explain US $ going up?) There are a host of global economic issues contributing to it.


Its hardly a platter when they will have to invest in sectors like food processing. As things stand the likes of Tesco are whole sellers in this country at the moment. Dont you think they will need to spend (defacto FDI) to expand their networks? There is a one time set up cost. But its a lot of money to set that up. I mean i buy a house only once in my life but its still a lot of money. As i said earlier 10 billion a year till 2020 is the price quoted. Indian infra has big acquisition hurdles. Contracts are handed out by government which muddies the issue. In retail the gov is stepping back.

and i would love to know how you dont call $140 billion deficit in trade and the collapse of the rupee a balance of payments crisis.The rupee is the worst performing currency of major emerging markets. Its because our inflation is high and our trade deficit to gdp ratio is high which remittances and FDI in their current form cannot make up.

the US can get away with it cause the USD is a safe haven currency, ie they are the world reserve currency. When shit hits the fan people goto the dollar.

At present they dont like the risk the Indian economy represents. Hence there is a flight from the rupee.

Most analysts agree with what i have to say (they are indian mostly btw)

http://www.reuters.com/article/2011/12/05/us-economy-india-funding-idUSTRE7B40JL20111205

The protests against Reliance were to a large measure political stunts (Mayawati in UP and the Commie cartoons from Bengal). Reliance has Pan India presence and how come the small businessmen did not protest everywhere?

and this is not a political stunt? Your telling me people are not opposing for the sake of it?

Give the policy makers of the US some credit , USA did not open up its economy because it was crazy for NAFTA but because it wilfully abdicated some sectors where it knew it was foolhardy to try to compete with low cost producing companies. It did not lost more jobs involuntarily to china but it is a concisous decision to import from it more as the cost of Production in the US can certainly not match that in China.

It does not mean that it goes crazy in opening up its Sensitive/Strategic sector to China. Just recall how US did not allow the Chinese State company to buy/aquire one of its Oil and Gas company.


How about you name one major sector (more than 5% of GDP) which the USA has not opened up.

why are they ranked 4th in the ease of doing business?

http://www.doingbusiness.org/rankings

don't know whether to laugh or cry :bash: :lol:

Retail FDI: Farmers body writes to PM, Biocon's Shaw supports (http://www.business-standard.com/india/news/retail-fdi-farmers-body-writes-to-pm-biocons-shaw-supports/152525/on)

So Labor > Trader > Farmer > Corporates. Does that surmise the echelons of power - falling from left to right - of each lobby in our country?

@Vicky

and just to say another thing.

FDI or 51% in retail for foreign companies is allowed only in cities with a pop more than 1 million (not metropolitan areas mind you i checked that)


Thats equivalent to 45 cities

http://en.wikipedia.org/wiki/List_of_most_populous_cities_in_India


with a net pop i calculated of about 130 million.

the small shop owners in villages and small towns will not be affected


So lets review


(a) 51% FDI so only 51% can be remitted back home to their host countries. 49% stays in the country with Indian partners.

(b) Can operate in 1 million plus cities only (by administrative divisions) which is about 45 at the moment or 130 million people. or about 10% of the nation's population.



so even if you say that its a sensitive sector, which its not. Its not as if India has opened a big hole.

dont kid yourself. Hundreds of millions? Indian work force in total is something like 600 million. 10 million in them represents less than 2% of the work force. I doubt even if there are 10 million small shops. I read a report which said there are 40 million people dependent (like small children whos father owns a shop) on small retail. That 3% of the pop.Agriculture which employs some 300 million people now that is a sensitive sector. Hell forestry and fishing employs more people than small retail. What also about the needs of the farmers? You think the small retailers and middle men are doing justice to a much bigger group?

The total number of people dependent on small retail business is still in Millions.
Share of Agriculture and Retail in India's GDP is now almost identical:

http://www.domain-b.com/economy/agriculture/20111209_gdp_falls.html

http://www.authorstream.com/Presentation/aSGuest12188-146911-retailing-india-entertainment-ppt-powerpoint/

How come the Govt does not have the guts to open up the Agricultural sector to FDI?
The same advantages of best practices of "foreign know-how" that are being said will "benefit the Indian customers" due to advent of organised players in Indian retail will also be applicable to the agricultural sector.

The Foreign investors will buy out small farms of the marginal farmers or lease them while employing the farmers to continue to till their lands(much in the the same way as the retailers will be displaced by the Big retailers) Let govt open up the Agricluture sector to FDI and then it can also allow FDI in Retail.



The is also no reason why these small traders cannot get jobs working for the big retailers. Just make a pact that small retailers have the option to be employed by the bigger ones.

Great you are advocating a self employed/small entrepreuner to become an employee!!! The small retailers be employed by the Big-Box retailers and then suffer low wages? Know how Walmarts of this world exploit their employees?


Reliance Fresh has flopped. Its making a loss. Much smaller big Bazzar is doing much better.

Reliance and Birla operations are not at a cash break even (does not mean it has flopped).The Big Indian players including Reliance are even today ramping up operations. In the future they will definitely be reaching cash break even point after which it will be profits.These are big business houses with deep pockets with definite business plans.Reliance ultimately plans 5,000 Branches and Birla is planning 2200+ across all the formats.


the entire point of 51% is to combine the know how of foreign with local giving the shot to the foreign one to raise equity etc.

Once the percentage point crosses 50.1 it hardly matters as the management has a veto to decide all the policy options. In this case it will be what to buy from where (from India?) at what price( Definitely Predatory).
If some of the Big Automobile and Engineering MNC companies can come to India at less then 51% controlling share and still give the "Know how" to Indian entities then why cant the Retail Giants came to India with less then 50% share and offer the same ? Woh Kya Upar se tapke hain?


Its not 100%. Which i oppose also.
Definitely it should not be even 51%. Anything upto 49% is good and is welcome, If the Foreign retailers are supposed to be that good then they are welcome to prove themselves at that level.


my friend even starbucks is single brand retail. Your not telling me that coffee is high end right? I can think of a million examples from Ben and Jerry's which used to rely on a partner or franchise owner in India or even McDonalds. Some companies were ok with it others were not. You can even get chains like JC Penny selling clothes at a discounted prices. It most certainly does not have to be high end.

Who says anything about opposing franchise operations or single brand retail? Its more then welcome.


even in your example, buying a stool from Ikea is not high end. Just saying.

It was clearly mentioned in sectors where there are no "worthwile Indian competitors". Hence Ikea and GAP were mentioned hence even the Louis Vitton and Gucci's of the world are more then welcome.



Its hardly a platter when they will have to invest in sectors like food processing. As things stand the likes of Tesco are whole sellers in this country at the moment. Dont you think they will need to spend (defacto FDI) to expand their networks? There is a one time set up cost. But its a lot of money to set that up. I mean i buy a house only once in my life but its still a lot of money. As i said earlier 10 billion a year till 2020 is the price quoted. Indian infra has big acquisition hurdles. Contracts are handed out by government which muddies the issue. In retail the gov is stepping back.

The back end infrastructure set up costs (especially in rural/semi urban area's where the processing ops will be set up) would not still be high compared to the the easy business that these retailers are assured off.


and i would love to know how you dont call $140 billion deficit in trade and the collapse of the rupee a balance of payments crisis.The rupee is the worst performing currency of major emerging markets. Its because our inflation is high and our trade deficit to gdp ratio is high which remittances and FDI in their current form cannot make up.

I have not said that the deficit and BOP is not a serious problem, what i am against is how retail industry FDI is being touted as the way to get out of that crisis. FYI there are other Bigger and much Better options available for FDI

http://economictimes.indiatimes.com/news/economy/infrastructure/chinese-firms-to-bid-for-india-infra-projects-china/articleshow/11047738.cms

You have mentioned $100 Billion over ten years as the likely FDI in retail.
Its clear that just 10% of the infrastructure sector FDI will equal or exceed what is anticipated from Retail.

The crucial difference is while in Retail sector Indian players have the money and the expertise is being gained, in the infrastructure sector by and large we dont have it and hence foreign FDI is reqd.



How about you name one major sector (more than 5% of GDP) which the USA has not opened up.
It is not just the GDP % but the sensitivity of the sector that should define what sector needs to be opned up.


why are they ranked 4th in the ease of doing business?

http://www.doingbusiness.org/rankings

Being the 4th easiest in doing business and a champion of free trade still does not stop it from dictating which sector remains closed off and who gets to invest.Does it?

@Vicky

and just to say another thing.

FDI or 51% in retail for foreign companies is allowed only in cities with a pop more than 1 million (not metropolitan areas mind you i checked that)


Thats equivalent to 45 cities

http://en.wikipedia.org/wiki/List_of_most_populous_cities_in_India


with a net pop i calculated of about 130 million.

the small shop owners in villages and small towns will not be affected

So lets review

(b) Can operate in 1 million plus cities only (by administrative divisions) which is about 45 at the moment or 130 million people. or about 10% of the nation's population.


so even if you say that its a sensitive sector, which its not. Its not as if India has opened a big hole.

How naive can people be.
You mean to say that a Govt which has given word in the not to distant past that FDI in multi brand retail is a definite no no and will not be opened up has now given its go ahead to start ops in cities with 1 Million plus population and will exclude other parts of the country is to be believed?
Get real boss. What is going to stop it tomorrow from opening it up to other cities/areas in the future?
Its clear that this caveat is being touted by the GOI to soften the blow and make it palatable for the Proposal to go through. Once it is done it is open house for the rest of the contry in the not to distant future.(After all the govt will require money to fight the next elections).



(a) 51% FDI so only 51% can be remitted back home to their host countries. 49% stays in the country with Indian partners.

49% FDI, so a good and still attractive 49% is remitted back home to the host countries and rest stays wherever it needs/wants to be.

From Tree to Mandi

Proponents of foreign investment in retail say that farmers are being shortchanged by wholesalers and retailers at present. Akshat Kaushal traces the journey of an apple consignment from the orchards of Sopore to the dining tables of Delhi.

It is early Monday morning and the Choudhary Hira Singh Wholesale Vegetable Market or Azadpur Mandi is buzzing with chaos. The roads inside the market are clogged. Everything from a hand-pulled cart to a tractor and a truck is vying for space where there is none. They all want to be the first to reach the market in order to sell the farm produce at the best possible price. There are stalls owned by commission agents where buyers (wholesalers) and sellers can meet and strike a deal. The seller then unloads his stock and the buyer takes these items to sell to green grocers across the city and elsewhere.

A truck laden with ginger has just come in from Siliguri in West Bengal, while there is another one with onions from Alwar in Rajasthan. The third in the queue bears a Jammu & Kashmir number plate. Inside the passengers’ cabin sits Abdul Hamid, an apple grower from Sopore, a town located 35 kilometers from Srinagar and better known as the apple town of Asia. Forty-something Hamid is dressed in the trademark kurta and pyjama. The fatigue of the long journey does not show on his weather-beaten face. He is here, after all, to make some serious money.
On Friday, Hamid, as on any other day, had performed his evening prayers and then got into this hired truck. During the day, workers had loaded 1,000 boxes of apple (15 kg each) onto the truck. Three hundred of these belonged to him and the rest to other Sopore farmers. The apples had been plucked from his orchard only a few days ago. Hamid had a fair idea of what each box would cost him by the time it reached the Azadpur Mandi: he had spent, on an average, Rs 150 on fertiliser, pesticide and labour, and another Rs 60 for the wooden box. The trucker had charged him another Rs 60 per box. In addition, the commission agent at the Azadpur Mandi would have to be paid a 12 per cent cut. The total cost was a little above Rs 300. The other growers, who owned the stock, were huddled with him in the cabin.

After a non-stop journey, apart from brief halts at Jammu and Ambala, Hamid and others brought the truck straight to Azadpur Mandi on Monday. Constructed in 1977, the mandi has the distinction of being the largest fruit and vegetable market in Asia, and has about 3,700 commission agents. It is the national distribution centre for fruit such as apple, banana, orange, mango, and vegetables like potato, onion, garlic and ginger. Hamid could have sold his stock at Sopore but a visit to Delhi was unavoidable. In March this year, before the apple trees had started bearing fruit, Hamid had taken a loan of Rs 1 lakh from his commission agent of two decades, Prem Kumar Chaudhary of Prem Fruits Traders. The loan had two strings attached: one, the commission agent would charge no interest, and two, a part of the farm produce would be sold through this commission agent and no other. That’s why Hamid is here.

* * * * *

Chaudhary is aware of Hamid’s arrival. They have been in touch through mobile phones. After a brief conversation, Hamid pulls out few samples of his apple stock and shows them to a trader from Azamgarh in Uttar Pradesh. The trader quotes the price and the deal is quickly sealed at Rs 600 per box. There are no handshakes at the end of it. The process, which can be described as an auction, is monitored by Chaudhary who pockets a commission of 12 per cent from Hamid and another one per cent from the buyer. However, the rules of Azadpur Mandi, which are laid down by the Agricultural Produce Marketing Committee, forbid any commission agent from charging beyond six per cent. Chaudhary has overcharged but no one’s complaining.

At Rs 300 a piece, Hamid’s 300 boxes had cost him Rs 90,000. Today he gets Rs 1.8 lakh, thus making a profit of almost 100 per cent. The entire truckload has been sold for Rs 6 lakh. The money will reach his bank account electronically. Prices this year are reigning high because the crop is relatively small. He has more stock waiting at home; but the cold in the valley will ensure that the apples survive for another three months.

Hamid says he will sell when prices rise further; he has till February to decide the right time. Moreover, now that his commitment to Chaudhary is done, he could sell in Sopore itself. “Selling in Sopore is profitable as we are able to avoid the transport expense. But we can’t avoid coming here,” says he. He also lets in that there is a good opportunity for arbitrage if prices at Sopore are different from New Delhi.

On the pavement, just a few steps outside the Azadpur Mandi, Rahim sells the same variety of “Sopore apple” at Rs 65 a kg. This is almost 60 per cent higher than what Hamid sold his apples for: Rs 40 a kg. Rahim looks least surprised when asked about his fat profit margin. He says that his business depends on a lot of “luck” and the risk factor forces him to sell at a high price. “Most of the times the produce doesn’t measure up to 15 kg and on other occasions the quality is poor. Our pricing has to take this into account,” he says. Further, he claims that he pays one per cent as commission to the commission agent, Rs 600 a month as bribe to the beat constable and another bribe to the Municipal Corporation. If he were to sell the apples some distance away from the Azadpur Mandi, he would have to factor in transport costs also, thus resulting in higher prices.

While in Azadpur Mandi, the modal price of an apple, categorised as 'delicious’ is Rs 34 as on December 5, 2011 (data by APMC Azadpur), but as soon as one steps out of this market the scenario changes drastically. According to to www.grocery.ebest.in, which lists prices at retail shops in New Delhi, all varieties of apples are selling at upwards of a whopping Rs 100. From Rs 20 a kg in Hamid’s orchard, the fruit has indeed come a long way.

http://www.business-standard.com/india/news/from-tree-to-mandi/458051/

if fdi in retail is good, whats the upside of rendering the mom n pop stores sons and daughters from small buisnes owners into till assistents in supermarkets?

if fdi in retail is good, whats the upside of rendering the mom n pop stores sons and daughters from small buisnes owners into till assistents in supermarkets?

The assumption inherent in your comment is that these mom and pop storeowners are poor, pitiable people. I don't think that is a truth. Most of them make good enough money but most of them don't pay taxes. If some of them cannot compete and have to work for the large retailers, then maybe it is not bad for them. With their experience maybe they can command a good position and salary. So that's not too bad.

But regardless, the problems with mom and pop stores is many. They cannot drive efficiency in the supply chain management. They don't have the scale, resources, technology or even motivation. They do not create competition in the market - I have never seen anybody selling any product below the maximum retail price (MRP). This MRP concept exists in India; lacking it these mom n pop stores would have skinned the customers. They don't have a good customer service. They don't have a return policy which is part of great customer service. Maybe the lack of scale limits their ability to negotiate with companies to allow them to return what customers have returned. They don't have resources to make any change in the system. Their productivity itself is very low - think about how many customers/worker/day can they service. As I said earlier, most of these stores don't pay taxes. I think a lot of the workers in those small stores would be better off wokring in large retailer because the large retailers can be regulated much better. Small stores cannot be easily regulated (on worker benefits, customer protection, financial liabilites etc.). Bottomline, they lack a lot of what is required to propel an economy towards an advanced/productive economy.

A big retailer has the money to provide exceptional shopping experience - some old but effective examples - such as electronic retailer can create living rooms in thier store to showcase HDTVs, latest sound system etc, Ikea can create model bedrooms, kitchens, living rooms right in thier store to showcase how different pieces of furniture would fit together. They have a lot of muscle power to negotiate with companies and even drive innovation in their vendors - I have seen BestBuy doing that in US. They themselves invest a lot of money towards creating infrastructure, buying new technologies and improving processes to make the backend more efficient. Look at the following video where robots move stuff in the warehouse (http://www.youtube.com/watch?v=lWsMdN7HMuA). Could you expect such technology innovation in mom-n-pop stores-only system? There will be competition, which will be good for customers.

Even then I think it will take a good number of years when the large retailers would show any impact at all and outside big metros I think it would take many many years (10+ years) because it depends so much on the right supply chain efficiency and infrastructure that will take years to build. There is enough time to make the small stores tighten their belt and think more professionally.

Do we need just the large retailers, No I don't think so because smaller stores have the community feeling to them and it allows a smaller enterpreneur to serve their customer differently from a big retail chain.
Do we just need the small stores, again No because of the reasons listed above. I think we need both and they do tend to complement each other in some important ways.
Overall, I think getting the large retailers from outside would be a positive step and the govt is doing it in small steps which is especially good.

so in case anyone had any doubts, the real story behind this little fdi retail escapade is simple.
Gongress knew it would lose, or , rather it didnt spend enought to win, but did , along with the opposition,want the winter session to stall because the realy important bill hasnt been passed, the anti corruption bill.no one wants it and will only ever join hamds to stall it.
very very bent

Truth vs Hype of FDI in retail|23 min video

http://www.ndtv.com/video/player/truth-vs-hype/the-truth-vs-hype-of-big-retail/218151?pfrom=home-topstories

so in case anyone had any doubts, the real story behind this little fdi retail escapade is simple.
Gongress knew it would lose, or , rather it didnt spend enought to win, but did , along with the opposition,want the winter session to stall because the realy important bill hasnt been passed, the anti corruption bill.no one wants it and will only ever join hamds to stall it.
very very bent


Comment: India's myopic politicians derail reforms

India is passing through a dystopian nightmare. The scene is as gloomy as it can possibly be. High inflation, low investment, falling growth rate and a widening gap between the rich and the poor, as testified by the Organization for Economic Cooperation and Development (OECD), have been compounded by the government's policy paralysis which has been diagnosed by an unnamed Congress minister as a symptom of Parkinson's disease.

What has deepened the murkiness is the government's ignominious retreat on permitting foreign direct investment (FDI) in the multi-brand retail sector under pressure from an opportunistic opposition and shortsighted allies. The backtracking appeared to be even more unfortunate since FDI in retail was heralded as the beginning of the long-delayed big ticket reforms.

The government's succumbing to the pressure is strange because both the Trinamool Congress and the DMK had let it be known that they would not vote against the government if there was an adjournment motion on the FDI issue in parliament.
There must have been a deeper reason, therefore, for the government's withdrawal from the battlefield. And, it is undoubtedly related to the by now well known differences between the "neo-liberal" Manmohan Singh and the "left-of-centre" Sonia Gandhi. Her studied silence on the subject of FDI during a Youth Congress rally the day after the decision was announced was the first indication that the prime minister and the Congress president were not on the same page on the subject.


Could Sonia-Ji be the the cause? Rahul and Congress are vying for the coveted upcoming UP elections - I willing to bet she nixed the whole deal just to give a pro-poor (aam admi) plank and not let other parties (read : BJP) gain political mileage out of FDI.

Farmers body meets PM, urges speedy implementation of retail FDI


The Consortium of Indian Farmers Associations (CIFA) today met Prime Minister Manmohan Singh and urged him to take steps for implementation of FDI in retail by the end of this month, saying this would help the cause of farming community.

The association, which claims to represent 40 million farmers, said it would be forced to go on an agitation from January 1, next year, if the demands are not met.


The Cabinet had last month approved 51% FDI in multi-brand retail. However, the decision was put on hold due to opposition from rival parties and some of the ruling UPA allies.
"On behalf of the farmers of India, we met Prime Minister Manmohan Singh and urged him to speed up the process of allowing foreign direct investment (FDI) in the retail sector before end of this month," CIFA Secretary General P Chengal Reddy said.

CIFA has also requested the Prime Minister to set up a regulatory body to check exploitation of farmers by commission agents, he added.

Explaining that FDI in retail will help farmers as the existing marketing system at local mandies and wholesalers is controlled by commission agents, he said farmers are compelled to pay commission in the local mandi.

The middlemen manipulate prices and do not provide any services and official receipts to farmers, Reddy pointed out.

When asked about the Prime Minister's response to their demands, Reddy said the Prime Minister said that there is a need to speed up investments in the agriculture sector.

"Prime Minister told us that liberalisation is the way to improve the condition of the farm sector and to provide more benefits to the farmers," he added.

Reddy said Singh told the delegation that he is in favour of FDI in retail but the government has to assure certain things.

"Prime Minister said the government is building a political consensus on the issue and at the same time it would ensure that consumers interests are protected," Reddy said.

CIFA threatened that farmers will launch a countrywide agitation in case FDI in retail is not implemented by December 31, 2011.

"We have conveyed to the Prime Minister that in case FDI in retail is not operationalised by December 31, 2011, CIFA will launch a nation-wide agitation from January 1, 2012," Reddy said.

According to Reddy, CIFA represents farmer groups spread across 12 states in India and about 40 million farmers are directly and indirectly associated with it.

http://www.business-standard.com/india/news/farmers-body-meets-pm-urges-speedy-implementationretail-fdi/152751/on

---double post---

FDI in retail — UPA ‘retired hurt’


Foreign direct investment in retail may be on hold, but Hillary Clinton can stop worrying about Anand Sharma and Pranab Mukherjee.

“How does (Commerce Minister) Sharma view India's current Foreign Direct Investment guidelines? Which sectors does he plan to open further? Why is he reluctant to open multi-brand retail?” Those were among the questions U.S. Secretary of State Clinton posed in a cable to her embassy in New Delhi in September 2009, some months after Prime Minister Manmohan Singh began his second term. (See: Hillary checks out Pranab, and the competition, from The Hindu-Wikileaks India Cables series: March 18, 2011).

Note her pointed query on opening up ‘multi-brand retail.' She had other worries, too. “Why was (Pranab) Mukherjee chosen for the finance portfolio over Montek Singh Ahluwalia? How do Mukherjee and Ahluwalia get along?” And “does Sharma get along with Mukherjee and Prime Minister Singh?” They get along fine, Hillary, and they're all in it together, as a team.

Hillary has reason to be concerned about FDI in retail. There's the tens of thousands of dollars she earned from serving as a director on Walmart's board. And the other thousands of dollars contributed to her 2007-08 campaign by Walmart executives and lobbyists. An ABC News report on that in 2008 also observed that as a director, Hillary Clinton remained “a loyal company woman” (Clinton remained silent as Wal-Mart fought unions: ABC News, January 31, 2008).

And she surely knows the UPA's FDI retreat is tactical. Pranab Mukherjee put it with disarming candour: we don't want mid-term polls. Hillary too had flip-flopped during her election campaign, going by the ABC News report. (While on its Board of Directors, she had said: “I'm always proud of Walmart and what we do and the way we do it better than anybody else” — June 1990.)

Yet, Hillary's campaign website of 2007-08, points out the ABC News report, omitted “any reference to her role at Walmart in its detailed biography of her.” As the race heated up, she recanted: “Now I know that Walmart's policies do not reflect the best way of doing business and the values that I think are important in America.”

Perhaps Hillary's FDI concerns are loftier. She must be worried about the poor Indian farmer. The wonderful thing about the FDI-in-retail debate is the explosion of concern for agriculturists. Never have struggling Indian farmers found so many champions. They've been crawling out of the woodwork ever since the FDI announcement. From Deepak Parekh to Ratan Tata, they've suffered sleepless nights, agonising over the small farmer.

They might want to take a look at the American farm population. At their family farms, especially smaller ones, wrecked by corporate monopolies at every level, from giant agri-businesses to mammoth retail chains. Presently less than one million Americans claim farming as their occupation. That figure was over 25 million in the 1950s.



http://www.thehindu.com/opinion/lead/article2706988.ece?homepage=true

Farmers body meets PM, urges speedy implementation of retail FDI




http://www.business-standard.com/india/news/farmers-body-meets-pm-urges-speedy-implementationretail-fdi/152751/on

That is the first time I'm seeing a PRO- capitalist agitation from the farming community!! :nuts:

Farmers body meets PM, urges speedy implementation of retail FDI



Yesssss!!!

they should put pressure on other political parties too

wow so thats 4crore farmers vs 5 crore traders(as claimed by BJP)!! I think I'll rather go with the farmers and so should the govt. coz they need to be looked after more than the traders, middlemen etc.

yes . these fuckers will play careers with indias future.

@vicky

just been swamped with work.

i will answer your posts in detail later.

Could Sonia-Ji be the the cause? Rahul and Congress are vying for the coveted upcoming UP elections - I willing to bet she nixed the whole deal just to give a pro-poor (aam admi) plank and not let other parties (read : BJP) gain political mileage out of FDI.

Right. Plus Rahul also has the tried and tested (by Congress) Muslim Card to trump:

http://expressbuzz.com/nation/rahul-plays-muslim-card-in-up-rally/343420.html

Rahul Gandhi comes out in support of FDI in retail (http://www.thehindu.com/news/national/article2720388.ece)

Terming the opposition as “anti-farmer”, Congress general secretary Rahul Gandhi on Friday came out openly in support of FDI in the retail sector saying it would help farmers.

Addressing a public meeting in Farrukhabad, which is the highest potato growing district in the country, Mr. Gandhi said that 60 per cent of vegetables go waste and FDI would provide a chance to the farmers to directly sell their produce.

On the fourth day of his five-day mass contact programme here, Mr. Rahul said, “farmers are facing problems as 60 per cent of vegetables go waste… we brought FDI in retail so that they could sell their produce directly”.

But the opposition stalled the move in the parliament as they are anti-farmer, he asserted.

Asserting that Congress had been working for the welfare of farmers, Mr. Gandhi recalled that loans worth Rs 60,000 crores were waived off for farmers and doors of banks were opened to them.

Without naming the BJP, he said that the government of “India Shining” had forgotten the farmers.


So maybe they CAN pass the bill. Especially in light of recent slowdown news.

The Jan 1 protest by farmer association will be very interesting! All depends on how the media covers it..

Dalits for FDI in retail

The original inhabitants of the land — Scheduled Castes, erstwhile untouchables or Dalits — feel that foreign investment in the retail sector has tremendous socially-liberating potential. Dalit leader and Chief Minister of Uttar Pradesh, Mayawati, has opposed the approval of foreign direct investment in retail, as mooted by the UPA Government at the Centre. “Mayawati's stand is political, mine is social,” says Mr Chandrabhan Prasad, political commentator and columnist, who supports the introduction of FDI. Even as the move to allow FDI in retail has been stymied for now, intellectual leaders of the Dalit community feel that FDI can remove untouchability in buying and selling.

The Dalits, more than a fifth of India's population, have, for centuries, been relegated to jobs considered ‘impure' by upper castes. By establishing a purely economic relationship in business, and delinking it from political and other forms of domination, FDI will be a boon to the socially and economically-backward communities, says Dalit scholar Mr Chittibabu Padavala. “While the negative consequences of FDI in retail to the economy are real, it has socially-liberating potential,” he says. Local business interests control the lives of the local population through a hold on the social, economic, political, cultural as well as educational aspirations of the people.

Mr Padavala points out that while the income of small businesses may not be adversely affected with the entry of foreign players, their overwhelming hold on society will get blunted. “Foreign capital uses local capital as its subordinate or broker, and the big capitalists work in tandem with local forces,” he says. At such a time, when the entry of foreign investment has the potential to open up several spaces for progressive forces in society, if the Left continues to represent local capital instead of grabbing these opportunities, it will be disastrous, says Mr Padavala. Public intellectual Mr Chandrabhan Prasad welcomes the plaza culture and asserts that unless culture breaks, caste cannot break.

LOOSENING CASTE STRANGLEHOLD

Notions of cleaning and sweeping, which were historically relegated to the domain of the lower castes, have undergone a transformation in plazas. A Brahmin boy works in the housekeeping department, Delhi University students work in restaurants doing odd jobs. While the taboos associated with cleaning have ended in plazas, they flourish on the streets of Delhi, he says. Political thinker, Professor Kancha Ilaiah, points out that if a Dalit sets up a shop in a village, nobody will buy from him, but if he is a manager in a plaza, then nobody will trouble him. Both Prof Ilaiah and Mr Prasad assert that FDI will be good for the economy and help break the monopoly of the bania community on the circulation of money.

Foreign businesses will purchase from small manufacturers, regardless of their castes. “To give an example, in villages, the kayasthas and banias are buyers and they don't purchase oil from the dalit producers as it is used in temples,” explains Prof Ilaiah. Dalits, who have historically been artisans, have great skill sets, but nobody invests in them. If foreign retailers buy and sell from them, it will boost their income, by however little.

http://www.thehindubusinessline.com/opinion/article2721009.ece?homepage=true

^^ I think all these farmers have to do during the protests is utter this statement : "We (the farmers) will rethink our political loyalty towards parties who are opposing FDI in retail".
That ought to spice things up :D

Dalits for FDI in retail



http://www.thehindubusinessline.com/opinion/article2721009.ece?homepage=true

^^^^ DALITS ARE CON(GRASSI) CHAMCHAS ANYWAYS SO. THIS KIND OF STATEMENT IS NATURAL, AND WHY SHOULDNT IT?? AFTER ALL, THESE UNEDUCATED CHIMPS GET FREE SEATS BECAUSE OF OUR SICKULAR AND IDIOTIC CONGRASS, THAT HAS LITERALLY RESERVED 75% OF SEATS... DONT KNIW WHEN DALITS WILL GET RID OF THEIR MENTALITY OF LICKING CONGRASSI A$$

^^^^ DALITS ARE CON(GRASSI) CHAMCHAS ANYWAYS SO. THIS KIND OF STATEMENT IS NATURAL, AND WHY SHOULDNT IT?? AFTER ALL, THESE UNEDUCATED CHIMPS GET FREE SEATS BECAUSE OF OUR SICKULAR AND IDIOTIC CONGRASS, THAT HAS LITERALLY RESERVED 75% OF SEATS... DONT KNIW WHEN DALITS WILL GET RID OF THEIR MENTALITY OF LICKING CONGRASSI A$$

I wonder how pesticide has not been used against this Kalkibhagwan chap so far. In all other forums that this "thing" has registered, the mods have kicked him out within a few days. This has to be the longest period he has survived in any forum. Look at his posting history - every other comment here is laced with abuse against other forumers.

Listen here Kalki - I am all for FDI in retail, and so are many other people on this forum. FDI in retail is beneficial for the economy as a whole, and that is the reason we support it. Get that into your thick head if you can. If you don't like it, tell us why it is not a good idea - let us hear what you have to say. If you cannot do that, go and drown in a pool of your own waste.

I wonder how pesticide has not been used against this Kalkibhagwan chap so far. In all other forums that this "thing" has registered, the mods have kicked him out within a few days. This has to be the longest period he has survived in any forum. Look at his posting history - every other comment here is laced with abuse against other forumers.

Listen here Kalki - I am all for FDI in retail, and so are many other people on this forum. FDI in retail is beneficial for the economy as a whole, and that is the reason we support it. Get that into your thick head if you can. If you don't like it, tell us why it is not a good idea - let us hear what you have to say. If you cannot do that, go and drown in a pool of your own waste.

good trolling I must say, this is just a political drama by congrassi govt. , it would literally shut down a huge money maker business, where do you think cost effective products wil come from?? India?? No ,they will be from our neighbour and everyone knows what happens once you get aaddicted to ur neighbours. Soon, we would be the next america, with no necesary industries back at home, do you have any idea, how our economy will work ??

good trolling I must say, this is just a political drama by congrassi govt. , it would literally shut down a huge money maker business, where do you think cost effective products wil come from?? India?? No ,they will be from our neighbour and everyone knows what happens once you get aaddicted to ur neighbours. Soon, we would be the next america, with no necesary industries back at home, do you have any idea, how our economy will work ??

That's better - slightly better than your usual standard.

Now, tell me - where do your bania shops stock things from? Saying that "FDI in retail will make us import from China" is the biggest lie and FUD that has been spread by the anti-FDI vested interest cabal.

The reality is that almost everything these days is made in China. I bought a showpiece in a small shop, and when I reached home, what do I see? "Made in China". If a large retail chain offers me exactly the same showpiece at 200 instead of 400, what is wrong with that?

We need to strengthen our manufacturing and have a separate set of reforms in manufacturing so that a lot of the stuff is produced domestically instead of having to source from China. But that is a separate discussion altogether - labour reform, manufacturing reforms, etc.

That's better - slightly better than your usual standard.

Now, tell me - where do your bania shops stock things from? Saying that "FDI in retail will make us import from China" is the biggest lie and FUD that has been spread by the anti-FDI vested interest cabal.

The reality is that almost everything these days is made in China. I bought a showpiece in a small shop, and when I reached home, what do I see? "Made in China". If a large retail chain offers me exactly the same showpiece at 200 instead of 400, what is wrong with that?

We need to strengthen our manufacturing and have a separate set of reforms in manufacturing so that a lot of the stuff is produced domestically instead of having to source from China. But that is a separate discussion altogether - labour reform, manufacturing reforms, etc.

don't know which country you live in bro. , but MOST of the products here aren't made in china. They are manufactured here, in our own cities. FDI retailers like walmart will order huge amounts of shits from china and other countries which would ultimately close down our own markets. Although, it will bring costs down, it will be a short term effect only. After a few years, the economy will definitely fall. Although, it can be prevented IF we start investing in equally important areas and also, in manufacturing. Add to that our security issue, once china gets a large portion of our markets hijacked, not only will it blackmail us (which is quite obvious I believe), also Chinese made goods, atleast those that are sold in India are of very poor quality, they hardly last for a week or so. But still dickheads like u will keep shouting FDI FDI becoz it wud take ur country a little more nearer to ur dear america or europe. You are either crazy or are too overconfident to bet on FDI at such an early stage. We must focus on strengthing our business abroad and should later think about FDI and all that.

:ohno:

:ohno:


I would rather laugh at this
and yes kalki you should not abuse anyone plz express your views in MILD LANGUAGE
:cheers:

There is a wonderful feature called "Add to Ignore List". View the offending person's public profile and under his name - click this holy grail of all SSC features :)

^^ Wow never knew this button existed...
How many cities would foreign retailers be allowed in if this goes through (whcih it should)?

initially to 47 cities.

good trolling I must say, this is just a political drama by congrassi govt. , it would literally shut down a huge money maker business, where do you think cost effective products wil come from?? India?? No ,they will be from our neighbour and everyone knows what happens once you get aaddicted to ur neighbours. Soon, we would be the next america, with no necesary industries back at home, do you have any idea, how our economy will work ??

Your economic plans should not focus on low cost production but should focus on high value products like Japan, Europe and USA.

How will your economy work you ask, well look at USA many high value products are still in the USA, your focus should be technology development, services but what's makes USA what it is today? well it's research and development, for example while many USA companies do great business overseas they do tend to send money back to USA for research and development which creates many high paid jobs then return sustain their local town or city economy.

The issue of other nation product dumping can be solved by imposing tariffs/taxes. As of today, finished products from other nations attract huge taxes. If Walmart or others import cheap products then the GOI should simply impose huge taxes. This would force the Retailer to quickly create a manufacturing plant in India. If you notice, most of these products have a parent US/European company behind them. The entire edifice of China's export market is due to these companies leveraging cheap labor/land/power/port facilities. India's SEZ and the new manufacturing policy should address the issues of the above. In addition to the tariff roadblock, the Govt can impose a stringent requirement of sourcing a substantial portion of products within India. The makers of these products would quickly embrace this option, since the other option is not competitive. Yes, they would always take the easy route but if you provide them a road map with clear cut rules they will adhere to them and make a success out of the options. They have the wherewithal to make things happen, and India is a huge market that has its own momentum.

FDI brings about large scale of operations and its attendant economic benefits. The operators of multi-brand retail have honed the technique to the nth degree. True competition amongst them will quickly enable a modern infrastructure for logistics, distribution and even export.

Just an aside: a modern retailer touting only "made in india" products sold here could become a national hit.

The issue of other nation product dumping can be solved by imposing tariffs/taxes. As of today, finished products from other nations attract huge taxes. If Walmart or others import cheap products then the GOI should simply impose huge taxes. This would force the Retailer to quickly create a manufacturing plant in India. If you notice, most of these products have a parent US/European company behind them. The entire edifice of China's export market is due to these companies leveraging cheap labor/land/power/port facilities. India's SEZ and the new manufacturing policy should address the issues of the above. In addition to the tariff roadblock, the Govt can impose a stringent requirement of sourcing a substantial portion of products within India. The makers of these products would quickly embrace this option, since the other option is not competitive. Yes, they would always take the easy route but if you provide them a road map with clear cut rules they will adhere to them and make a success out of the options. They have the wherewithal to make things happen, and India is a huge market that has its own momentum.

FDI brings about large scale of operations and its attendant economic benefits. The operators of multi-brand retail have honed the technique to the nth degree. True competition amongst them will quickly enable a modern infrastructure for logistics, distribution and even export.

Just an aside: a modern retailer touting only "made in india" products sold here could become a national hit.

good point... but do you seriouly believe our govt. will do it?? dude, there's a HUGE gap between what we think of our "idealistic" govt. and what our govt really is... Indian govt is useless, it cant show aggressiveness, it cant show unity , they just fight with each other and pass out... with such conditions hoping such things will happen automatically is disasterous,,, A few crores in bribe and our govt will be the "paltu kutta" of these big american markets... this is not china, here, a single decision takes 2 yrs or more just to pass... with that we can kiss our growth rate goodbye

good point... but do you seriouly believe our govt. will do it?? dude, there's a HUGE gap between what we think of our "idealistic" govt. and what our govt really is... Indian govt is useless, it cant show aggressiveness, it cant show unity , they just fight with each other and pass out... with such conditions hoping such things will happen automatically is disasterous,,, A few crores in bribe and our govt will be the "paltu kutta" of these big american markets... this is not china, here, a single decision takes 2 yrs or more just to pass... with that we can kiss our growth rate goodbye

For decades and decades, the government never became anyone's "paltu kutta". Why all these fears now, when we are richer and stronger than ever before?

This is exactly the same thing people were saying in 1991. People were whining about how the Western companies will come and finish off Indian business. Now it has been exposed, what liars and deluded people those commies were.

For decades and decades, the government never became anyone's "paltu kutta". Why all these fears now, when we are richer and stronger than ever before?

This is exactly the same thing people were saying in 1991. People were whining about how the Western companies will come and finish off Indian business. Now it has been exposed, what liars and deluded people those commies were.

True, even I feel some sense in it, I'm not completely opposing it, anyways, how much will it increase our economy? (I m asking not taunting) , but at the same time it can also turn upside down and something can seriously go wrong,just bcoz 1991 deal went well doesn't necessarily mean it will always be successful , who doesn't want to see this country grow? I'm just worried, this time something may go wrong that's it

True, even I feel some sense in it, I'm not completely opposing it, anyways, how much will it increase our economy? (I m asking not taunting) , but at the same time it can also turn upside down and something can seriously go wrong,just bcoz 1991 deal went well doesn't necessarily mean it will always be successful , who doesn't want to see this country grow? I'm just worried, this time something may go wrong that's it

Well, maybe a phased approach is best - start with the metros and see if it drastically changes shopping habits or consumption trends...

I think we can impose tariffs on Chinese goods, making it cheaper for the retail chains to source domestically, if dumping of cheap goods is a problem...

How FDI in retail will hurt farmers

http://www.thehindubusinessline.com/multimedia/dynamic/00874/bl26shekhar_JPG_874360e.jpg

With the government stating that its FDI policy on multi-brand retail will be on hold till after the UP elections, the publicity assault to prepare the ground for it to be brought back is palpable. The strategy employed is the classic “divide and rule”.

“If the trader groups are against FDI, then let farmer groups be set up to fight the trader groups” seems to be the ploy. We now see repeated stories in the media about how FDI in retail will benefit the farmers of India. We could have taken this seriously, but unfortunately the global evidence points in the other direction. Farmers in the West have paid a big price, with hundreds of thousands forced to shut down their farms, due to corporatisation of the farming sector, along with corporate concentration on the purchasing side among processors and retailers.

BIG RETAILERS' BIZ MODEL

Big retail in the West and elsewhere functions on a simple business model.

Grow bigger and bigger till the market becomes an “oligopsony” — a situation where a small number of buyers exert power over a large number of sellers. The UK food retailing industry, for example, is now dominated by just four supermarket chains who together account for over two-thirds of retail food sales.

Likewise, the top five chains in the US account for over 60 per cent of food sales.

This results in the retailer exercising enormous control over their suppliers, which includes the farmers. This is shown in the diagram above:

It is this structure that has reduced farm prices and has forced the closure of farms. Foreign retailers will replicate this structure in India over time, with disastrous consequences for the Indian farmer.

PUNJAB EXAMPLE IS WRONG

A prominent TV channel featured the story of a few farmers in Punjab highlighting how direct purchases of produce by a retailer had given them a higher yield. This is a type of faulty reasoning described in college textbooks as “the fallacy of composition”. The fallacy of composition arises when one infers that something is true of the whole from the fact that it is true of some part of the whole.

The channel had obviously hand-picked a few farmers who suited its conclusion. The only way to assess the impact on farmers is to look at countries where big retailers dominate the market, and see how the entire farming community has fared.

LOWER PRICES TO FARMERS

A good way to measure the effect of retail power on farmers and farm workers is to look at the portion of each dollar spent on food at the supermarket — referred to as the retail food dollar — that goes back to the farm.

By this measure, virtually all food producers in the US have seen their share of the retail food dollar decline over time, at points dropping so low that farmers have been forced out of business in droves. Here are just a few examples:

In 1970, hog producers (those who raise pigs) in the US derived 48 cents of the retail dollar spent on pork. Three decades later, they received only 12 cents out of every retail dollar, causing loss to the farmers. While this happened, consumers didn't benefit from the low farm prices at all: retail pork prices stayed stable. (Source: Agribusiness Accountability Initiative)

According to the US Department of Agriculture's Economic Research Service, in 1990, ranchers and farmers received 60 cents of the retail dollar spent on beef, retailers received 32.5 cents and meat companies 7.5 cents. In 2009, the numbers were reversed — retailers took 49 cents share of each dollar (up 16.5 cents) consumers spent on beef, while ranchers and farmers got 42.5 cents (reduction of 17.5 cents) and meat packers 8.5 cents.

The breed of the small rancher/farmer in the US is under threat as they go out of business in large numbers year on year. (Source: http://bloom.bg/et4eLU (http://bloom.bg/et4eLU)) In the UK, the Royal Association of British Dairy Farmers has complained vociferously that prices paid to farmers for fresh milk are simply unsustainable, with the average farmer losing money on each litre of milk produced.

This has happened even as the supermarkets' margin on fresh milk has increased steadily over the years.

While it costs the consumer £1.45 to buy four pints of milk at a supermarket such as Tesco, the farmer receives just 58 pence (40 per cent) of this, causing a loss of 3 pence for every four pints. Small farmers have closed their dairy operations as a result.

In India, dairy farmers receive as much as 75 per cent of what the consumer pays for a litre of milk. (Source: http://news.bbc.co.uk/2/hi/uk_news/magazine/8103119.stm)

SUBSIDIES PROP FARMING

If big foreign retailers are expected to shore up our farmers as claimed by the publicity reports, there is no evidence of this in the countries where these retailers have spread their wings the widest.

In the US, farmers received direct commodity subsidies of over $167 billion in the period 1995-2010 (Source: http://farm.ewg.org/region.php?fips=00000)

The European Union paid direct farmer subsidies of €39 billion ($51 billion) in 2010 alone. Why these subsidies if the big retailers are paying the best prices to the farmers as claimed?

SORRY EXAMPLE OF MEXICO

Mexico (population 112 million) signed the North American Free Trade Agreement in 1994. It has since witnessed a virtual takeover by Walmart which has gained nearly a 50 per cent share of the country's retail market.

Mexico can now be described economically as a vassal state. A combination of big retail and imports under NAFTA has driven over 1.25 million small Mexican farmers — 25 per cent of the country's farmers — off their farms. Consequently, the illegal immigration to the US, which was to have been reduced because of NAFTA, has more than doubled to nearly 6 million Mexicans.

Even a fraction of such a displacement in India, arising out of misguided policies, will cause social disruption on a vast scale. (Source: http://www.yesmagazine.org/issues/reclaiming-corn-and-culture (http://www.yesmagazine.org/issues/reclaiming-corn-and-culture))

India has more than 58 million small farmers, 12 million small retailers and 26 million small and micro enterprises representing over 450 million people.

The 300 MPs of the parties who opposed FDI in retail are right. Disturbing this mass of people is not politically sustainable.

The author is Group CEO, R K SWAMY HANSA and Visiting Faculty, Northwestern University, US. The views are personal.

http://www.thehindubusinessline.com/opinion/article2747451.ece?homepage=true

:doh:

this is talking about "corporatisation of farm sector" which means farming by corporates whereas here we are talking about sourcing and then retailing, i think corporatisation involves 100% FDI. Has big bazzar or reliance fresh started farming? NO.

So don't except the "RETAILERS" to farm.

Sometimes i feel why does Hindu prints such trash every now and then.

^^ do u think if they dont allow fdi in India(doesnt look like any time soon) big bazzar could be indias wamart?

no way, they don't have any money to become walmart.

:doh:

this is talking about "corporatisation of farm sector" which means farming by corporates whereas here we are talking about sourcing and then retailing, i think corporatisation involves 100% FDI. Has big bazzar or reliance fresh started farming? NO.

So don't except the "RETAILERS" to farm.

Sometimes i feel why does Hindu prints such trash every now and then.

It is also talking about retailing and its impact on farmers.. Some stats are also cited under 'LOWER PRICES TO FARMERS'.

A perfect leftist view of the issue... Not at all surprised that it is coming from a JNU guy..

Legitimising an inhumane discourse

The UPA government mercifully has decided to keep in abeyance its decision to allow 51 per cent foreign equity in multi-brand retail. What is disturbing however is the argument with which it sought to justify its earlier decision, which represents a shift towards a palpably inhumane discourse in matters of economic policy. One must protest against this shift before it becomes “acceptable.”

The official argument stated that FDI in multi-brand retail would benefit “consumers” (whoever they are), and peasants and small producers from whom the retail MNCs would procure supplies. Let us for a moment accept these arguments, notwithstanding their vacuity (exposed by C.P. Chandrasekhar in The Hindu, Nov. 30). Nobody however has claimed that the induction of retail MNCs will not harm the small retailers. Even the government's own argument that confining retail MNCs to cities with more than ten lakh people will limit the damage to petty retailers, actually concedes that such damage will occur. There is, of course, an element of dishonesty involved in this argument: since it is not worth MNCs' while to set up shops in villages, what is claimed as a restriction upon them conforms precisely to what they want anyway; but the argument itself vindicates the critics. And since the bulk of employment in petty retail at present is in urban areas, the fact that FDI in retail will cause substantial damage to the livelihoods of vast numbers of people is indubitable. Promoting it therefore is based on the presumption that distress for them should be acceptable because of the benefits that would accrue to other sections of society.

This argument however is dangerously violative of a humane discourse. It is analogous to saying that since the processing of minerals will bring benefits, by way of availability of manufactured goods, to some sections of society, the distress caused to the tribal population which has to be uprooted for obtaining the minerals should be of no concern. And it is exactly identical to the argument put forward in the colonial context that since imported manufactured goods were of superior quality and benefited the consumers (who would not have bought them otherwise), among whom were numerous peasants, the fact that they destroyed the livelihoods of millions of artisans and weavers, should not be held against the policy that freely allowed such imports. In fact the argument for FDI in retail is a precise recreation of the discourse of colonialism.

It is instructive here to recollect the rhetorical question that Gandhiji had asked: If “my brother” the weaver is out of work because of imported cloth, then how can I be better off by it? The humaneness of this discourse was the foundation upon which our anti-colonial struggle was built, and we came into being as a nation. The current official discourse constitutes a rejection of it.

Interestingly, the current official position is antithetical not only to the humane discourse that Gandhiji was propounding, which postulated that no section of the population should consider itself better off by some policy if certain other sections belonging to the non-affluent were pushed into greater distress by it, but also to what even conventional economic theorising suggests.

Vilfredo Pareto, the Italian philosopher-economist, had suggested a criterion for comparing alternative states of society, which has acquired wide currency in economics. According to it, between social states A and B, if there are some persons who are better off, and nobody is worse off, in A compared to B, then A is socially preferable. On the other hand, if some persons are worse off in A compared to B while others are better off then we cannot say that A is to be preferred to B. Taking A to be the social state where MNCs are operating in retail, it clearly follows that we cannot consider their operation to be socially preferable to a state where they are not operating.

The Pareto criterion has major lacunae, the most obvious being that it flies in the face of egalitarianism. If the poor continue to remain as poor in A as they were in B but the rich become much richer, then A is socially preferable to B according to Pareto despite the increased inequality. Not many would accept this view: egalitarianism may override Pareto, but not the converse. But in the case under discussion, if we introduce egalitarian considerations in addition to Pareto, then the argument against MNCs in retail gets further strengthened. Not only will their operation, no matter whether it benefits some sections of society, hurt others, but those hurt will include a substantial number of the poor. Both Pareto and egalitarianism therefore point in the same direction, namely, jettisoning the move to introduce FDI in retail. What is intriguing is that a government headed by an economist should have ignored this basic bread-and-butter economics.

Even if we keep egalitarianism aside, just to pass the Pareto test, the least that the proposed policy should have provided for is a system of compensations, effected through the government budget, for those who stand to lose by it, to be paid for by those who stand to gain from it. But then it may be asked: who exactly stands to gain from it? The government's answer to this question is palpably absurd. The insertion of some gigantic MNCs which would act as oligopsonists vis-à-vis the sellers of produce, consisting of a set of peasants and petty producers, and as oligopolists vis-à-vis the buyers, consisting again of a set of relatively small consumers, is bound to act to the detriment of both these sets. International experience, contrary to the claims of the Central government, testifies to this. But let us for the moment accept for argument's sake the possibility that a large number of people may gain from this move. Of one thing however we can be absolutely certain, namely that the MNCs will gain from it. It stands to reason therefore that the MNCs should be asked to pay for compensating the petty retailers who will lose from their entry, and that they in turn can recoup this by charging whoever gains from their entry. (And if this makes transactions with them unattractive for buyers or sellers, then so much the better, for it will then serve to prevent the supplanting of petty retailers).

For the introduction of FDI in retail to be at all a credible measure for consideration, it is essential therefore that it should be accompanied by a system of compensations for the losers, for example in the form of an Income Guarantee Scheme for the petty retailers. Even with such a system of compensations, FDI in retail can still be objected to on grounds of violating egalitarianism; but without such a system it is simply not worth considering at all. And if such a system of compensations is considered infeasible on administrative or any other grounds, then too it follows that FDI in retail is not worth considering at all.

The process of destruction of petty business by capitalist enterprises was referred to by Marx as “primitive accumulation of capital.” While Marx had seen primitive accumulation as occurring at the beginning of capitalism, it obviously characterises the entire history of capitalism which is marked by violence and predatoriness. But unleashing a process of primitive accumulation of capital, such as what FDI in retail amounts to, is not only violative of humaneness, but also undermines both democracy and the foundations of our nationhood. Having a system of compensations, say in the form of an Income Guarantee for petty retailers, is one way of preventing primitive accumulation of capital. It still does not make FDI in retail acceptable; but it makes it minimally worthy of being placed on the table for discussion.

What is frightening about the current situation is the way measures which are not even minimally worthy of discussion and which entail primitive accumulation of capital, are being imposed upon society through executive fiat. And, to justify this, as many have pointed out, one section of the poor is being spuriously projected as constituting gainers, so that the distress caused to another section can be conveniently overlooked.

http://www.thehindu.com/opinion/lead/article2750054.ece?homepage=true

It is also talking about retailing and its impact on farmers.. Some stats are also cited under 'LOWER PRICES TO FARMERS'.

and why are they using stats of EU or US which are developed markets? Why not china, South africa, Indonesia or Malaysia?

^^
fallacy of composition, as explained in the article.

The author himself does that by taking examples that justifies his point

A perfect leftist view of the issue... Not at all surprised that it is coming from a JNU guy..

Legitimising an inhumane discourse



http://www.thehindu.com/opinion/lead/article2750054.ece?homepage=true

I wish someone bombs JNU and reduces it to a pile of rubble!!! :bash:

Just look at the kind of shit they come up with. Marx, "distress caused to the tribal population", "discource of colonalism", " Income Guarantee Scheme for the petty retailers".

I hate these people. :puke:

FDI in India is a flop plan, I am pretty sure the babus might be getting billions of $$ for this all crappy thing, it would be better if they promote Indian companies and let them benefit the country, we SHOULD NOT invite parasites in our homes who would literally suck every penny out of us....I dont know about others, but this nautanki should be buried six feet under the ground and should never be brought up AGAIN... have a peaceful death FDI....

and why are they using stats of EU or US which are developed markets? Why not china, South africa, Indonesia or Malaysia?

Precisely!

The government on Tuesday allowed 100% foreign direct investment (FDI) in single-brand retail, paving the way for marquee brands such as Prada, IKEA, GAP and sports goods majors to set up exclusive outlets in India. The outlets will be owned and managed entirely by them.
"The government has decided that FDI up to 100% would be permitted in Single-Brand Product Retail Trading, subject to specified conditions," a department of industrial policy and promotion notification said.
This means that although global supermarket giants such as Walmart, Tesco and Carrefour may not be able to set up deep-discount stores in India yet, others such as iconic furniture brand IKEA and apparel retailer GAP — ones that sell just one brand under their roofs — will gain entry.

"This step will provide stimulus to domestic manufacturing value addition and help in technical upgradation of our local small industry," said commerce and industry minister Anand Sharma.

The move comes a month after the government had to withdraw its decision to allow 51% FDI in multi-brand retail.

http://www.hindustantimes.com/News-Feed/Business/Door-opens-for-100-FDI-in-single-brand-retail-business/Article1-794030.aspx

Thanks for this information really grate information about Indian Economic ,..

Govt's decision to allow FDI in retail has large support

The Government of India on Friday said its decision to open multi-brand retail to foreign investment has large support and it is consulting the stakeholders to work out the implementation guidelines.

The government was forced to put on hold the Cabinet decision of November 24 to open FDI in multi-brand retail under intense pressure from the opposition parties and its own ally - Trinamool Congress.

However, Prime Minister Manmohan Singh had stated that the government has not abandoned the decision to allow 51 per cent FDI in multi-brand retail.

The Department of Industrial Policy and Promotion (DIPP) has been consulting small groups of stakeholders including consumer organisations, small industries and farmers.

"From the feedback which we have got so far... as far the basic decision of the policy is concerned, everyone has been supportive of the decision," DIPP Secretary P. K. Chaudhery told reporters here after meeting farmer associations.

He said that every section wants its interest to be protected to reap the maximum benefit out of the policy.

"So, it (consultation process) is more in the nature of the implementation guidelines that people were talking," he added.

The secretary said that farmer associations are "by and large" supportive of the government's decision.

"They welcomed FDI into retail sector. The point which they were making were that in terms of implementation of this policy, that there should be some safeguards," he said.

The associations said state governments should amend the APMC act "to get the full benefit of FDI in the retail sector".

The associations which were present in the meeting include Jagriti Agro Tech, Alliance for Sustainable and Holistic Agriculture Organic Farming Association of India, Bharat Krishak Samaj and Kisan Jagriti Manch.

The decision to allow FDI in multi-brand retail had imposed some conditions on the foreign retailers. These included a minimum investment of $100 million, of which half should be in the back-end infrastructure like cold chains, processing and packaging.

The retailers would also have to source at least 30 per cent of manufactured and processed products from small-scale units.

Source : Link (http://www.deccanchronicle.com/channels/business/news/govts-decision-allow-fdi-retail-has-large-support-444)

IKEA holding off. concerned about 30% sourcing from local SMEs

IKEA CEO meets Anand Sharma, willing to work with SMEs: Govt
Amid reservation over the 30 per cent sourcing clause for 100 per cent FDI in single brand retail by multinationals, government today said Swedish furniture retailer IKEA's Chief Executive Officer Mikael Ohlsson has met Commerce Industry and Textiles Minister Anand Sharma.

According to an official statement, Ohlsson who met Sharma in Paris yesterday has expressed willingness to be involved in strengthening of SMEs in India.

"He (Ohlsson) conveyed to the minister that India is an important market and Ikea would like to be involved in strengthening of SMEs in India," the statement said.

Ohlsson shared his views on the local sourcing clause in the FDI policy with regard to single brand retail, it added.

Earlier this month the government had notified opening of 100 per cent FDI in single brand retail, with a clause of 30 per cent mandatory sourcing from SMEs.

According to the statement, Ohlsson would soon visit the country to meet concerned officials and stakeholders.

IKEA has already stated that the sourcing clause "might be difficult for us to live up to".

Link (http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/ikea-ceo-meets-anand-sharma-willing-to-work-with-smes-govt/articleshow/11714345.cms)

Thats the way to go. Use the advantage of a large market to make the MNC's come in on our terms.
Its no use calling in the MNC's only to have them import more from outside and add even more to the burgeoning trade deficit.

I dont know if this is the right thread, but i thought it was good so...

Will India scuttle potential Rs700 cr investment of Apple stores?


iPad and iPhone maker Apple operates more than 360 company-owned, company-operated (COCO) stores in 12 countries. Of these 360+ COCO stores, almost a third (115 stores) are outside the USA.The average annual sales per Apple company store in the last 12 months was a whopping $48.4 million (Rs242 crore).Apple’s retail business employs more than 41,000 people.

Apple’s flagship store on Fifth Avenue in New York City’s Manhattan borough (overlooking Central Park) is open 24 hours a day, 365 days a year, and supposedly did business of $800 million (Rs4,200 crore) in 2011.That’s more than the total turnover of Lifestlye and Shopper’s Stop put together. This iconic store is the most photographed place in all of New York City — more than Empire State Building, Rockefeller Center or Times Square.

In India, Apple does not have any COCO stores as yet. The company’s products are retailed from 35-odd exclusive Apple stores labeled as Apple Premium Resellers (APR) or from hundreds of multi-brand stores such as Croma, Reliance Digital and Vijay Sales. Apple’s product sales in India are now estimated to be above Rs6,000 crore per annum, including products bought by Indians while traveling abroad. The best performing Apple Premium Reseller stores in India are almost touching sales of Rs30 croreper annum — reason enough for Apple to consider opening COCO stores, at least in the three major metro markets - Mumbai, Delhi and Bangalore.

If Apple does open COCO stores in India, these are likely to be standalone stores on prominent high streets, as Apple usually likes to make a strong statement with its retail presence. But where? Will either Brihanmumbai Mahanagarpalika, New Delhi Municipal Corporation or Bruhat Bengaluru Mahanagara Palike allow Apple to put up iconic stores on footpaths (we don’t even have any left!) with the main retail area underground? Current municipal bye-laws in these Indian cities do not allow human habitation or commercial business in basement floors.

Apart from the archaic municipal bye-laws, there is another major hitch that may become an unnecessary and unwanted show-stopper. Apple COCO stores typically sell speakers, cameras, bags, sleeves, cases, printers, scanners, storage media, as well as other peripherals and accessories from dozens of third-party brands. Does this make an Apple store a multi-brand store?

If it does, this is really bad news for India, as Indian policy still does not allow foreign direct investment (FDI) in multi-brand retail. This is a pity, as Apple stores are basically single-brand stores but the third-party accessories technically make them a multi-brand retailer. Apple currently invests an average of $38 million per new COCO store globally. If we factor lower costs in India than the global average, the investment per store is unlikely to be below $23 million (or, Rs117 crore) per store.

If Apple were to open COCO stores in India, it would probably set up at least six stores, with a potential investment of $138 million (around Rs700 crore). In the six-year period from February 2006 (since FDI up to 51% in single-brand retail has been allowed) to January 2012, the actual foreign investment inflow in the retail sector has reportedly been less than $45 million. And here is a potential $138 million investment which will get disqualified on unnecessary technical grounds. No wonder China is far ahead of us in attracting foreign investment - not just in manufacturing, but in most sectors of the economy.

The government should have an immediate relook at the foreign investment policy, and define single- brand retailers as those who derive more than two-thirds of their total revenue from a single family of brands owned by the retailer itself. This will allow genuine single-brand retailers such as Apple to open stores in India.

We are proud of our IT industry and give it all kinds of concessions and incentives. Can’t we give it a proper retail environment to buy Macs, iPads and other Apple devices? In fact, can’t we give the fantastic Apple retail experience to hundreds of thousands of Indian youth who love Apple products? Or will Mamata Banerjee stall this potential investment also saying that apples, bananas and oranges can be sold only by pavement-dwelling thelawalas and kirana stores?

The writer is chairman of Asipac, India’s leading mall development managers and retail research consultants, and founder of Men & Boys, Asia’s largest chain of retail stores for men’s skincare and grooming


http://www.dnaindia.com/analysis/column_will-india-scuttle-potential-rs700-cr-investment-of-apple-stores_1670708