FDI in retail is the best decision for the deteriorating Indian economy if executed well, said S. Narayan, President of the Centre for Asia Studies.
Speaking at a guest lecture on FDI in retail at the P.S. Higher Secondary School , Narayan said the Indian economy could develop based on the consumption and investment demand of people, irrespective of class.
Large investments in the retail sector will see better employment opportunities in agro-based sectors, logistics management and front-end retail.
China’s growth in retail and wholesale trade approval of 100 per cent FDI in retail is a good case in point, said Narayan, a retired IAS officer and former economic advisor to the Prime Minister.
On the other hand, global retail giants may resort to predatory pricing to build monopoly, resulting in essentials being dominated by foreign organisations, he said.
The shopping density in India is large — there are 11 shops for every 1,000 people. There are 1.2 crore shops employing over 4 crore people; 95 per cent of these are small shops managed by the owners themselves.
Large-scale job losses
So, India needs to watch out for the big international supermarkets, which may displace small retailers, leading to large-scale job losses.
Small retailers have, in fact, been erased from developed countries like the US and Europe, said Narayan. South-East Asian countries had to foist strict zoning and licensing regulations to moderate the evolution of supermarkets.