Is FDI in retail a death knell for SMEs?

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: and better logistics induced by large supply chains. India too, has a strong manufacturing base in consumer durables. Thus, the fear that FDI in retail will devastate small businesses is grossly exaggerated.

India’s retail sector is already undergoing a change propelled by evolving consumer demand and lifestyles, urban chaos and shortage of retail space, integration of markets, a need for revamping logistics, and above all, global competition. FDI may hasten this change, and even benefit SMEs. It would be better if FDI is allowed in phases, giving time for policy adjustments, and with appropriate riders on procurement to ensure that small producers gain from it. The debate must shift into the realm of ‘how’ instead of ‘why’.

We exported carpets to a Greek firm on CAD basis. Citing delay, the buyer asked for 47.5% discount. We agreed against cash payment, got RBI’s permission and issued a fresh Bill of Exchange. But there’s no buyer response. What should we do to stop the auctioning of our goods, which are still at port and get our payment?

—Super Quality Carpets, Chauri Road, Alampur Badohi

From your communication, I presume you sent the consignment without ECCG cover. The CAD basis is not a safe instrument. If you did not send the original set of Bill of Lading directly to the buyer, there may still be some chance to realise the payment.

First, get your banker to communicate to the buyer’s bank that the party has not made the payment, and the documents should not be delivered to them. Second, immediately instruct your shipping agency asking them not to deliver the consignment to the buyer. But, if you are afraid of auction of goods by port authorities, there is little you could do except to go there directly and seek assistance through the Indian embassy.

In case the buyer has taken possession of goods already, you may take help from private bad-debt collection agencies. There are many such agencies in Europe, which you can easily find though the internet. Choose one that does not ask for upfront payment, but works on commission basis. Some of these agencies which you may try on your discretion could be: Your Collection Solution, Inc. Tel: +1-954-475-9656; 1st Locate UK Limited Tel: +44113-228-4452; CBC International: Tel: +44-151-5153014 Fax: +44-151-5153015

— Anil Bhardwaj is secretary-general, Fisme.