FE@CAMPUS MASTERMIND: Response by Dhawal Pratap Singh to question for Jan 7-13
The Indian Retail Industry, valued at $270 billion, is also one of the fastest developing ones in the world. With organised retail forming just a minor 4.5% of it, the introduction of FDI in multi brand retail in India is an ominous sign for the economy as well as the industry.
The move will help invite new entrants into the market thus serving a purpose of improving the domestic competition along with bringing investment into the country. Moreover, at a time when the country was facing economic troubles, the move ensures huge inflows of foreign exchange as the industries start setting up their infrastructural base in India. Ikea has already announced a $250 million plan for investment into India. Such initiatives will not only help in job creation and employment but also help the country gain in terms of capital and technical knowledge, thus improving the overall quality of products.
In the immediate future, even the kirana stores be unaffected by the FDI. In order to compete, the companies will first have to set up supply chains and logistical capabilities, spurring significant improvements in the infrastructure needed to source, ship, store and deliver products. Also, it will induce investments from the competitors thus acting as a force multiplier. All this projects a prosperous picture of quality product available to the consumer without the hassles of middlemen or trade
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