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Wednesday, 30 November 2011

Impact of FDI in retail

Huge investments in the retail sector will see gainful employment opportunities in agro-processing , sorting, marketing, logistics management and front-end retail.

* At least 10 million jobs will be created in the next three years in the retail sector.

* FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen.

* Foreign retail majors will ensure supply chain efficiencies.

* Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce post-harvest losses.

*This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted.

* Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation.

* A strong legal framework in the form of th
e competition is available to deal with any anti-competitive practices, including predatory pricing.

* There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail.
Thailand has experienced tremendous growth in the agro-processing industry.

* I
n indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers
.

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