Foreign Direct Investment in India in Multi Brand Retail - A Political Hot Potato or a Boon for Indian Consumers? Sen Archisman Assistant Professor, International Marketing and Entrepreneurship, Amity International Business School, Amity University, Noida (UP) India Online published on 19 June, 2014. Abstract 7 December 2012 was the day when the Central Government in India allowed 51% FDI in multi brand retail in India. The approval was obtained in Parliament despite stiff opposition from both the right and the left of the political spectrum and from allies as well. This would potentially open the doors for some major Global Chain Retailers in India of the likes of Wal-Mart (United States), Carrefour (France), Mark and Spencer (UK), TESCO (UK), Shoprite (South Africa). This policy could have effects on major stakeholders which are as follows. Modern Retail workers Consumers Small retailers (Kiranas and Hawkers) Supply chain intermediaries (Wholesalers)
In the Indian context Indian states have the right whether to accept or reject the policy. Furthermore domestic industries have been protected because investors have to source 30% of their products from micro and small industries with a cap of $ 1 million in capital investment. There are more safeguards in that retail stores can only be opened in cities with populations over 1 million and a foreign company's initial investment has to be at least $ 100 million. Concerns have been raised by UNI Global Union regarding Wal Mart's global track record of dealing with retail workers. In my conclusion I have stated that even though this is a political hot potato any new government at the centre is unlikely to go for a drastic reversal of the policy keeping the larger interests of millions of Indian consumers in mind. Furthermore Indian consumers might develop a genuine respect for Indian retailers who can stand up to International competition. Are we ready for an increase in national pride? Top Keywords Foreign Direct Investment, Multi Brand Retail, Global Retail Chains, Modern Retail workers, Consumers, Small Retailers, Supply Chain intermediaries. Top |