FDI in retails in India

The govt.has decided to allow FDI(Foreign direct investment) up to 51% in multi brand retail.It explains that global retailers can come to India with a local partner and set up stores here.Till now FDI was not allowed in multi-brand retail.

This decision of the govt. is  an enable policy that will open up new doors of opportunity  to acquainted the retail industry with new market trends,particularly for agri products and small scale industry.

The main advantages of it like -

The farmer will get a better price for commodity and there will not be any intermediaries.For the small scale industry,they will find new buyers and cheap and better quality source of their products.Here consumer will get better prices over different varieties.Up to a greater extent it tackles rise in food prices and Inflation due to availability of food items on cheap price.It will create ample amount of oppurtunities in agro-processing,logistics,supply chain.

In the regards of the safeguards to protect its own industry,govt. has formed rules & regulations for it,like-

·         Minimum investment by the global retailer will be $100 million and 50% of which will be in backend infrastructure that will control wastage and help local farmers.

·         It has been mandatory that 30% sourcing will be done from Indian small scale industry.By this,it will protect local manufacturers,and they will be encouraged to expand capacities and more employment.

·         These stores can be set p only in cities with the population of more than 10 lakhs,so that the small players will not get affected.This will improve the quality of the product and reduce the costs.

·         In order to ensure supply to Public distribution system,govt. will have the first right to the procurement of agri-products,so here food security is also considered.