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FDI In Retail - Part II

Let us take the debate on FDI in retail a little further.
The arguments against the FDI in retail are:

  1. MNCs will kill the small retailer.
  2. We are selling India to the foreigners.

Let us look at the first one first.
If the small retailer  is destined to die, he will not need a Wal Mart or Tesco to kill him, the big boys of Indian business are enough to kill him. Some of the topmost business houses in India be it Tatas, Reliance, Birlas, Goenkas, Rahejas, Mittals all are already present in organized retail.  Each one of these top business houses have enough of their own capital as well as access to borrowed and/or equity capital whenever they may choose to raise it.
So do you really think the big MNC guys will come and start targeting the neighborhood kiryana store whose monthly sale probably will be less than the electricity bill of a large hypermarket?
Even if the MNCs start killing Indian retailers it will first be the big Indian retailers, and they should be the ones who should worry about their survival. But none of them sound worried to me, most of them are planning to either take the MNCs heads on or get into some kind of joint venture with the MNCs, like Mittals of Bharti fame already have with Wall Mart for the cash and carry business and backend logistics. So this whole logic of MNC killing the small guys does not hold truth, if the small guy has to fade away he will fade away with or without MNCs coming to India.

We will look at the other argument in the next post. Would love to hear from you on this one.


  1. yup.. very much agree.. and I guess the small time retailer in our neighborhood will always be there for emergency stuff and daily stuff that we use. It's not always convenient to run to a super market for routine stuff. So, I guess inviting these big MNC's in India should just improve the variety that is at offer to us and provide much needed employment to our youth. :)

  2. Hi Anonymous: I agree with you job opportunities will increase as well as investment in infra will also get boost. In my next two posts I have written a little about the same

  3. i don't really agree with you here...

    when there is a price rise...who gets the most behind their back MNC's or the poor people?
    so when the MNC's will rule the country and are willing to give goods at half the price than other indian kiranas...will tata's or birla's will be the most effected?
    no they will find ways of getting their way's they have the resource and money to find a way out....but what about the local retailers?

    how many people do you think are employed under Tatas, Reliance, Birlas, Goenkas, Rahejas, Mittals ...if i am not wrong it's less than 1 % of indian population but right from your door step to every nook and corner of India you can see a person working in PAN shop (beetle NUT) and earning their livelihood...can you tell me the percentage of people who earn their livelihood from these local retailers to kiranas to bettle nut's more that 30 %