The Ghost of Foreign Direct Investment Retail in India

Way back in 2010 -2011 I expressed the views regarding the FDI  Foreign Direct Investment in retail , it has been a roller costar ride  the decision was hold back by the government when the initially introduced, and now the parliament impasse over it. Lets analyse the scenario of  Mumbai

Food shopping in India is not a precious affair, even in Bandra a posh suburb in Mumbai. German cars and $100 highlights are common here, but you can’t see any super markets.

Less than a tenth of India $430 billion of annual retail sales takes place in organized retail comparing to the developed world.

The govt motives are benign, facing a wobbly rupee and high inflation it wants to show it is still capable of bold action to boost the business confidence.

Liberaliasation will lower food prices by cutting out middle man and the waste.

Perhaps a third of the crop rot on road side and on ware house before any one has a chance to smother them in species wolf them with Chapattis.

The arrival of Wal-Mart (WMT) Stores Inc. and Carrefour SA (CA) would have an invigorating effect like few events in the 20 years that Singh has been modernizing India’s economy. As finance minister in the early 1990s, he introduced free-market measures that cut red tape, removed caps on steel and cement makers and allowed overseas names like Ford Motor Co. to do business locally. These changes deserve as much credit for India’s 7 percent growth as anything.

A labyrinthine distribution system involves myriad middlemen and helps inflate prices in a nation where hundreds of millions live in, or on the cusp, of extreme poverty — the $1-a-day kind. Yes, this system employs millions, but at a very high cost.

India can’t turn back the clock on where the world economy finds itself. Opening the retail industry isn’t some out-of-the- blue act of economic radicals; it has been debated for 15 years now and is an essential part of India’s growth story in the long run.

Unfortunately the decision pending with the politicians in the parliament.

Seems like Singh’s Retail Retreat a ‘Nail in the Coffin’

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