Response to question for Jan 7-13: FDI IN MULTI-BRAND RETAIL HAS FINALLY BEEN PASSED. WHAT WOULD BE THE IMMEDIATE BENEFITS, AND FOR WHOM?
This decision, as being analyzed and identified by all parties has two possible scenarios. The first being the general views of the supporters of the decision – as the consumers and manufacturers getting benefited. There will a reduction in intermediate expenses between manufacturing and consuming, the resulting value being transferred to any of the two sections. Also there is an expected improvement in the back end supply chain infrastructure and employment in this scenario.
The second is the view of the opposition for this FDI decision – suspecting the benefits will mostly be to the multinational companies which will be investing in our country both in retail and other sectors. They may go on to enjoy undue advantage due to the dominant market share.
If we look at an immediate time frame the first scenario is most likely to happen as the multinational companies will be aiming to add value to the consumers or the manufacturers. Because there will be an initial challenge for them to turn attract consumers and turn into a trusted enterprise, the foreign firms are expected to provide economical prices and develop robust backend infrastructure/supply chain in the upcoming time frame.
Batch of 2012-14,
Faculty of Management Studies.
(This entry is part of our FE MASTERMIND contest. The views expressed in this article are personal and not that of the newspaper.)