Instead of putting the ‘FDI in multi-brand retail' issue in freeze, the Government should educate every stakeholder on the pros and cons of this and clear any misapprehensions and bring everyone of them on board, said Mr T.T. Ashok, Chairman, Confederation of Indian Industry (CII), Southern Region.

Expressing concerns over the “slow pace of the reform process”, he said the country needs huge investments for infrastructure development during the 12th Plan and we have to bring in a lot of FDI. Domestic retailers will certainly not take a beating by opening up of the retail trade. In fact, it would only drive inclusion in all its facets – social, economic and financial.

Beneficial for farmers

Quoting a CII study conducted by the Boston Consulting Group, he said farmers in India today receive on an average 25-30 per cent of the end consumer price, while in more developed markets this is in the 50-70 per cent range. A significant portion of this mark up is due to large number of intermediaries.

Organised retail has the potential to drive efficiencies in the supply chain by increasing price realisation for farmers by 10-30 per cent through sourcing directly or closer to the farm; by reducing handling and wastage by 25-50 per cent through consolidation as well as investments in back-end technology; and upgrading farmers' capabilities by providing know-how and capital.

Giving the example of China, where still a large number of domestic retailers do much greater business than Wal-Mart's and Carrefour's there, he said even by 2020, when India's retail trade size is expected to cross $1,260 billion, a chunk of this will be brought in by all those Mom & Pop stores.

Awareness programme

The Indo-American Chamber of Commerce too, suggests a nationwide awareness programme on this issue. In a press release, it says the fears expressed in the public domain about the fault lines of FDI in multi-brand retail are largely based on presumptions, hearsay and inadequate data of the consequences of FDI in various sectors in India, as also the global experience.

The Chamber's President, Mr Anand Desai, says that opening up of the retail trade should not be seen in isolation. Along with FDI in multi-brand retail, there should be a surge in investment in the cash-and-carry segment, which will help smaller shops to source quality goods at cheaper prices for onward sale in their localities.

The price advantage, which they can derive, can be shared with consumers. Besides, it will also create gainful employment opportunities. Retail chains would require services of thousands of skilled and semi-skilled persons to man the retail shops and unskilled persons for movement of produces for the growing, storage and processing centres.

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