FDI In India

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FDI IN RETAIL-A VIRTUE OR A VICE?

INTRODUCTION

India, the Golden Bird, has always had a mystic enticing effect on the foreigners. Since ancient times, India has been a trading ground for spices, handicrafts, cotton, minerals etc. This was the reason why traders and merchants from Britain, France, Denmark, Spain, Portugal etc. came to India to invest in the glory of Indian economy. Even the advent of Britishers in India was marked by the British East India Company for the purpose of trading. India has always been an adobe for foreign direct investments since its historical era. FDI was responsible for transition of India from a self- sufficient nation to a country heavily dependent on foreign goods. The scenario is still the same. Let’s take an example of clothing. Among the top 10 brands of denims in India, only 3 are Indian brands which include Flying Machine, Killer and Spykar. This clearly shows our reliance on foreign brands. Whether FDI is a boon or a bane for India has become a hot topic of debate these days. FDI was detrimental for India in the past and its effect is still the same in the present.

India has reached a population of 121 crores with the third largest purchasing power parity (PPP) in the world. It is the second most emerging market in the global village and has become an attractive destination for Foreign Direct Investment. It is believed that FDI will provide a stimulus for growth to the Indian economy. It will enhance our foreign exchange earning capacity. It will result in monopolistic market conditions which, in turn, would attenuate prices and improve the quality of the products. But the consumers are not the sole beneficiaries of FDI. Farmers will get a good price for their output which would encourag...

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... to without further ado. According to me, FDI in education is a better option than FDI in retail as education is the key to prosperity. If the government is serious about creating jobs then it should focus on improving sectors within the country namely manufacturing, agriculture and infrastructure development. The domestic retailing sector should be allowed to grow and consolidate first before the sector is opened to FDI. Targeting the mass market with refined products will not define growth. Growth will be achieved by innovations that would make a feature rich product affordable in the mass market. India has the youngest population and is the largest producer of fruits and vegetables in the world. We are blessed with abundant natural resources. If all the resources are efficiently and effectively utilized, then we will definitely be riding on high economical waves.

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