1983-2011 Posted November 22, 2011 Posted November 22, 2011 India's multi-billion-dollar retail industry could soon face a major overhaul after years of being heavily protected as the government plans to ease restrictions on foreign ownership. America's WalMart, the world's largest retailer, is inching towards a greater share on the subcontinent from its current two per cent share. Currently, the Indian government does not allow foreign companies to sell directly to the end consumer; instead, they may only trade as wholesalers. But this is a scenario that is set for a change. 4Vb870FX6d8&feature=channel_video_title
zen Posted November 22, 2011 Posted November 22, 2011 Walmart = good for consumers .... bad for its competitors, esp. for Indian retailerswhich in general are not that global or have deep resources or large economy of scale as Walmart
achilles Posted November 22, 2011 Posted November 22, 2011 A part of me feels sorry for the Big Bazaar's and More's of India. But competition is a good thing. And for a student like me, I can finally get a respectable job that doesn't involve half the stuff these Indian "mahasuper chains" make Post-Grads too.
achilles Posted November 22, 2011 Posted November 22, 2011 For the customers, this is gonna be a win-win situation. Prices are going to be very competitive and the customers will get a chance to pick the best deal among many options. For the country, additional players in the market will play a huge role in increasing the contribution of this sector to the economy.
ravishingravi Posted November 22, 2011 Posted November 22, 2011 I am all for open Market and more competition.
Sachin=GOD Posted November 22, 2011 Posted November 22, 2011 This was long overdue. But even now the Govt is only allowing 51% FDI.
Holysmoke Posted November 22, 2011 Posted November 22, 2011 A part of me feels sorry for the Big Bazaar's and More's of India. Dont. These are the guys that are going to benefit the most.
Lurker Posted November 22, 2011 Posted November 22, 2011 A part of me feels sorry for the Big Bazaar's and More's of India. But competition is a good thing. Thats the big misconception people have. How has Wal-Mart helped competition?? In its own country it has run every other departmental stores into the ground. And for a student like me, I can finally get a respectable job that doesn't involve half the stuff these Indian "mahasuper chains" make Post-Grads too. You will still be doing the same thing. When Accenture comes to India to do IT consulting it does not do anything different than TCS. No reasons to be different here.
Anonymous Posted November 22, 2011 Posted November 22, 2011 A part of me feels sorry for the Big Bazaar's and More's of India. But competition is a good thing. And for a student like me' date=' I can finally get a respectable job that doesn't involve half the stuff these Indian "mahasuper chains" make Post-Grads too.[/quote'] Trust me, I work for one of the so called supermarket behemoths indirectly and everyone on their graduate programs do some pretty menial stuff.
Mariyam Posted November 22, 2011 Posted November 22, 2011 I am all for open Market and more competition. Thats hardly going to be the case. * The increased competition is only going to be in items of consumer durables, luxury items, household cleaning goods and processed eatables ( chips, chocolates, non alcoholic beverages, processed meats etc). * Essential items or food raw material ( for those of foreign origin) will still have their entry barriers or some may be still be on the negative list ( or its equivalent) and Walmart might find it uneconomical to sell those here. Thats a segment the GoI has protected from 1947. They won't change it for Walmart. Remember what happened to Reliance Fresh, what it started out as and where it is today. * Best movers, it seems, will be local FMCG goods, who will get extra distribution points. Was reading an article by somebody from the Bombay Chamber of Commerce. He is of the impression that foreign retailers ( due to some of the tariffs) just will not be able to compete with the local retailers in case of a price war. They'll press the their respective govts to get the GoI for some kind of legislation that curtails unrestricted price wars.
yoda Posted November 22, 2011 Posted November 22, 2011 ^^Walmart's core business isn't produce/perishables. It is mainly clothes and house ware.
Mariyam Posted November 22, 2011 Posted November 22, 2011 ^^Walmart's core business isn't produce/perishables. It is mainly clothes and house ware. Its not just Walmart vying for entry. There are others too. Marks and Spencers ( food an clothes centric) Another chain from Thailand/Malaysia that is houseware centric etc
Sachin=GOD Posted November 27, 2011 Posted November 27, 2011 25 of 53 cities may be out of bounds for foreign retailers NEW DELHI: With Tamil Nadu chief minister J Jayalalitha raising the red flag against FDI in multi-brand retail, nearly half of the 53 cities may slam the doors on global chains. According to the 2011 data on the Census of India website, there are 46 cities that had a population of 10 lakh, of which 25 are unlikely to allow the likes of Walmart, Carrefour and Tesco to open stores since the political leadership in these states have gone on the offensive against the government's move to permit global retailers to set up shop in the country. The statement issued by the government after the Cabinet meeting on Thursday had said 53 cities would benefit from the new policy Apart from Jayalalitha, the BJP-ruled states, Uttar Pradesh chief minister Mayawati, West Bengal CM Mamata Banerjee and Bihar CM Nitish Kumar have made public their stand against the latest FDI liberalization move from the UPA, which is keen to shake off the perception of policy paralysis. Among the BJP-governed ones, Gujarat chief minister Narendra Modi has welcomed the opening up. Although in the past, he has been autonomous of the leadership, he is unlikely to deviate from the party's stand. That leaves the foreign retailers to tap into Congress-ruled states such as Maharashtra, Rajasthan, Haryana and Andhra Pradesh apart from Punjab, where BJP ally Shiromani Akali Dal has supported the move, and Orissa. Commerce and industry minister Anand Sharma said that several states ranging from Punjab and Orissa to Maharashtra and Rajasthan have backed the UPA's reform move. But several cities such as Bangalore, Chennai, Ahmedabad and Vadodara would put up the 'closed' sign given that retail trade is a state subject and opening of stores require clearances from municipal bodies, registration under the Shops & Establishments Act and the sales tax department apart from support from the district administration. Jayalalitha's opposition to multi-brand retail will impact entry into three cities - Chennai, Madurai and Coimbatore. "The purported intention of the government of India seems to be to bring more foreign investment into the country to improve market efficiency and bring down double-digit inflation prevailing in the country, mainly due to the series of policy blunders made by the Congress-led UPA government at the Centre. Does our nation lack such resources or the technology to deal with such problems? The central government should realize that constraints on farm products, on the supply side, which is one of the contributory factors to food inflation cannot be addressed through the FDI route, but only by squarely addressing the infrastructural constraints through appropriate policy support," she said in a statement. In the terms of number of cities, the biggest impact will be felt in Uttar Pradesh, where seven cities - Meerut, Ghaziabad, Agra, Lucknow, Kanpur, Allahabad and Varanasi - will remain out of bounds. Then there is Gujarat and Madhya Pradesh, with four each. While the global giants are still going to stay interested, the threat of arson, violence and the political dimension that the cabinet nod has acquired, the appeal would have come down a notch despite the vast potential that Middle India offers to international chains dealing with dwindling demand in their home markets. Based on the present support base, Maharashtra, with large middle-class dominated areas in and around Mumbai and Pune will emerge as the most attractive destination given that there are eight towns and cities where foreign retailers can open stores. On its part, the government is hoping that sooner than later, states will realize the opportunity that modern retail format, with foreign participation, offers. Out of bounds? Uttar Pradesh: Lucknow, Meerut, Ghaziabad, Agra, Kanpur, Allahabad, Varanasi Gujarat: Ahmedabad, Rajkot, Vadodara, Surat Madhya Pradesh: Gwalior, Indore, Bhopal, Jabalpur Tamil Nadu: Chennai, Madurai, Coimbatore West Bengal: Kolkata, Howrah Jharkhand: Ranchi, Dhanbad Karnataka: Bangalore Bihar: Patna Chhattisgarh: Raipur Link
punjabi_khota Posted November 27, 2011 Posted November 27, 2011 Walmart knows how to run a tight ship. It will cut down the inefficiencies in the supply chain and very well could decrease inflation.
varun Posted November 27, 2011 Posted November 27, 2011 The main advantage of this move would be in cleaning up efficiencies in the back-end. There is a clause in the bill that forces the foreign companies to invest 50% in the back-end supply chain.
Tiger80 Posted November 27, 2011 Posted November 27, 2011 Wise decision by Govt .They have given full freedom to states whether to allow or not to allow FDI in Retail in their states .Opposition is creating unnecessary Drama
ravishingravi Posted November 28, 2011 Posted November 28, 2011 Thats hardly going to be the case. * The increased competition is only going to be in items of consumer durables, luxury items, household cleaning goods and processed eatables ( chips, chocolates, non alcoholic beverages, processed meats etc). * Essential items or food raw material ( for those of foreign origin) will still have their entry barriers or some may be still be on the negative list ( or its equivalent) and Walmart might find it uneconomical to sell those here. Thats a segment the GoI has protected from 1947. They won't change it for Walmart. Remember what happened to Reliance Fresh, what it started out as and where it is today. * Best movers, it seems, will be local FMCG goods, who will get extra distribution points. Was reading an article by somebody from the Bombay Chamber of Commerce. He is of the impression that foreign retailers ( due to some of the tariffs) just will not be able to compete with the local retailers in case of a price war. They'll press the their respective govts to get the GoI for some kind of legislation that curtails unrestricted price wars. It is still too early to make a call. The nitty gritties of bill and what is in and out have not fleshed out entirely. But from what I gather so far, it has political masterstroke by Kangress and absolute howler by BJP. Although looking at debates today, the picture seems somewhat different to what you have mentioned. Entry barriers would be thwarted. I think it seems obvious you are bringing in 51% FDI. You are right about reliance fresh, but clearly something needs to be done. It is better than 8 years of policy paralysis.
Tiger80 Posted November 28, 2011 Posted November 28, 2011 Given the debate that's raging over opening the retail sector to foreign direct investment, we bring you the government's view, the opposition's objections and TOI's take on the issue. Government argument * Huge investments in the retail sector will see gainful employment opportunities in agro-processing, sorting, marketing, logistics management and front-end retail. * At least 10 million jobs will be created in the next three years in the retail sector. * FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen. * Foreign retail majors will ensure supply chain efficiencies. * Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce post-harvest losses. *This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted. * Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation. * A strong legal framework in the form of the Competition Commission is available to deal with any anti-competitive practices, including predatory pricing. * There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail. Thailand has experienced tremendous growth in the agro-processing industry. * In Indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers. * In any case, organized retail through Indian corporates is permissible. Experience of the last decade shows small retailers have flourished in harmony with large outlets. Opposition's argument * Move will lead to large-scale job losses. International experience shows supermarkets invariably displace small retailers. Small retail has virtually been wiped out in developed countries like the US and in Europe. South East Asian countries had to impose stringent zoning and licensing regulations to restrict growth of supermarkets after small retailers were getting displaced. India has the highest shopping density in the world with 11 shops per 1,000 people. It has 1.2 crore shops employing over 4 crore people; 95% of these are small shops run by self-employed people * Global retail giants will resort to predatory pricing to create monopoly/oligopoly. This can result in essentials, including food supplies, being controlled by foreign organizations. * Fragmented markets give larger options to consumers. Consolidated markets make the consumer captive. Allowing foreign players with deep pockets leads to consolidation. International retail does not create additional markets, it merely displaces existing markets. * Jobs in the manufacturing sector will be lost because structured international retail makes purchases internationally and not from domestic sources. This has been the experience of most countries which have allowed FDI in retail. * Argument that only foreign players can create the supply chain for farm produce is bogus. International retail players have no role in building roads or generating power. They are only required to create storage facilities and cold chains. This could be done by governments in India. * Comparison between India and China is misplaced. China is predominantly a manufacturing economy. It's the largest supplier to Wal-Mart and other international majors. It obviously cannot say no to these chains opening stores in China when it is a global supplier to them. India in contrast will lose both manufacturing and services jobs. Times View In principle, governments should not prevent anybody, Indian or foreign, from setting up any business unless there are very good reasons to do so. Hence, unless it can be shown that FDI in retail will do more harm than good for the economy, it should be allowed. A major argument given by opponents of FDI in retail is that there will be major job losses. Frankly, the jury is out on whether this is the case or not, with different studies claiming different findings. Big retail chains are actually going to hire a lot of people. So, in the short run, there will be a spurt in jobs. Eventually, there's likely to be a redistribution of jobs with some drying up (like that of middlemen) and some new ones sprouting up. Fears of small shopkeepers getting displaced are vastly exaggerated. When domestic majors were allowed to invest in retail, both supermarket chains and neighbourhood pop-and-mom stores coexisted. It's not going to be any different when FDI in retail is allowed. Who, after all, will give home delivery? The local kirana. Why would anyone shun them? If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices. Mega retail chains need to keep price points low and attractive - that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn. The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak. To begin with, it's very unlikely that global retail will ever become monopolies. Stores like Wal-Mart or Tesco are by definition few, on the outskirts of cities (to keep real estate costs low), and can't intrude into the territory of local kiranas. So, how will they gobble up the local guy? Secondly, it can't be anyone's case that farmers are getting a good deal right now. The fact is that farmers barely subsist while middlemen take the cream. Let's not get dreamy about this unequal relationship. http://timesofindia.indiatimes.com/india/Who-is-afraid-of-FDI-in-retail/articleshow/10912659.cms
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