FDI in retail: What's in store

The Cabinet has approved 51 per cent FDI in multi-brand retail, a decision that will allow global mega chains like Wal-Mart, Tesco and Carrefour to open outlets in India. The Cabinet also increased the foreign investment (FDI) ceiling to 100 per cent from the present 51 per cent in single-brand retail.

PROS

Those who support FDI in retail say that it will cut intermediaries between farmers and the retailers, thereby helping them get more money for their produce.

PROS

Those who support FDI in retail say big retail chains will invest in supply chains which will reduce wastage, estimated at 40 per cent in the case of fruits and vegetables.

PROS

The supporters say that FDI in retail will  bring much-needed foreign investment into the country, along with technology and global best-practices. It will actually create employment than displace people engaged in small stores.

PROS

The supporters contend that FDI in retail will induce better competition in the market, benefiting both producers and consumers and help in bringing down prices at retail level and calm inflation.

CONS

Those opposing the move said the it will lead to closure of tens of thousands of mom-and-pop shops across the country and endanger livelihood of 40 million people.

CONS

Those opposing say It may bring down prices initially, but fuel inflation once multinational companies get a stronghold in the retail market and farmers may be given remunerative prices initially, but eventually they will be at the mercy of big retailers.

CONS

Those opposing FDI in retail say that small and medium enterprises will become victims of predatory pricing policies of multinational retailers and it will disintegrate established supply chains by encouraging monopolies of global retailers.