Ever
since independence, India has been wary whenever it came to trade beyond
boundaries. Had it not been for Rajiv Gandhi’s initiatives and
determination, despite intense criticism in mid-80s, and the new Industrial
Policy of 1991, India would far off be lagging behind at a global stand.
Picturing the recent trade scenario, India
had been on guard regarding the FDI in retailing. Though a 100% FDI for the
single brand retail is allowed, the 30% sourcing clause acts as a bottleneck to
the comparable entries. The pitiable impact speaks for its inefficiency as the
Swedish furniture and home-ware retailer IKEA, among the firsts to push for
permission, expressed that it would be difficult for it to "live up
to" some of the conditions of the policy implemented by India, but still
looks forward to the entry in the economy when the terms "are appropriate".
Abhorring the clause, Mr Arvind Singhal, Chairman, Luxury Connect said, “This
condition ( on sourcing) is highly impractical and illogical. Big brands
entering India would not like to source from SME players as they cannot match
up to the standards of global retailers. We believe that the Government cannot
force this condition on brands wishing to scale up in India.”
The proposal of 51% FDI in multi-brand is being debated upon. The policy is
expected of not only creating more intense competition but also is believed to
bring down prices and facilitate higher quality coupled with consumer
satisfaction. Brands like Tesco, Wal-mart and Carrefour awaiting it’s entry
would give a motivational kick to the multi-brand retailing of the nation and
help them match the international level.
Following the footsteps of China, India
proposes to let 100% FDI in multi brand retailing with the six metros- Delhi,
Mumbai, Kolkata, Chennai, Hyderabad and Bangalore and intends to eventually
expand the horizon depending on the success rates in these cities. However, the
matter is put to the backburner in the budget2012-13.
The BJP, however, expresses its outright non
acceptance out of desperate emergency on behalf of the livelihood of about 50
percent of the country’s population engaged in unorganised retail and try to
draw attention towards the impact of such liberalisation in multi brand
retailing on the unskilled labour of local vendors and the numerous kirana stores.
Favoring the opening of India’s multi-brand
retail trade to FDI, the Economic Survey 2011-12 concluded the positive
impact in terms of curbing the food inflation in the country along with other
benefits it brings.
Such a policy not only will generate numerous
employment opportunities but also will provide the economy the boom it deserves
at this hour. The fall in consumption and the slow movements of the sector
needs to be accelerated so as to enable the growth, no close equivalent can be
viewed. Also the politicians should keep a check over their filthy reactionary
rage for it is time we all think towards the nation’s development.
