FDI in retail - what is my view

The government in India had just recently launched the FDI in retail and it has created a furies in the country and has almost stopped the functioning of the parliament.

There have been multiple newspapers which have done their analysis on this topic and this is the hot debate topic on all of the news channels.

Here are my views

FDI is good for the country an opening up the retail sector will bring in much needed investment for us. There is no doubt about this.
But let's look at the policy and what retail companies are looking for.

Companies want to make profit. That is their main objective, others bring secondary to this one. As the fdi is opened up, companies see the following..

Huge positive impact to their revenues and huge positive impact to their bottomlines. Now they have no doubt that they will jump at this opportunity.

Now these companies can make good profit or abnormally high profits also , it all depends on the policy that the government brings in.

Right now there is no restriction on where these companies can buy their goods from. They will as per the present policy buy from the lowest cost locations across the world. We all know that India is not the cheapest in the world.. There are multiple countries which are much more competitive than india . China, bangladesh , the list is endless.

What this will do is that the Market for our Indian good will get depleted since we are not competitively priced. Since these giants will not buy from India we will not have improvements in the supply chain infrastructure .. It will be there but it will be from the import ports to the chains.

This will make us more of an import economy like the us and reduce our self reliant nature.

So , as the policy stands today .. It is not good for India .

What should the government do.. They should look at making it compulsory for the chains to buy 80% + from India in value and volume both. This will force them to improve out infrastructure and make India more competitive, and they will even make good profits!

So Mr Singh, honourable PM of India .. Please take the right smart investment decision, tweak some of the policies decisions