Benefits of FDI in retail

The gain of consumers


Large superstores are inflation busters. In the WalMart Effect, the author Charles Fishman shows that big stores squeeze costs and pass on the gains to consumers, because of formidable competition. They had contributed to the sustained low inflation in the US. Similarly modern supermarkets can tame the inflation tiger in India. They can create jobs, prevent wastage and improve logistics. Which sane person will oppose them?

India's 28 b retail sector will grow by factor of nine within ten years. India's archaic retail sector cannot cope up with the rising demand. Inbuilt inefficiencies and wastage in distribution and storage account for 40%, which does not reach consumers. Fifty million children are malnourished. Foodgrains rot in obsolete warehouses or in transit. Wastage and loss will be avoided by companies who sole aim is profit !





A Bharti-WalMart store in India

Critics point out five major factors

India does not need foreign retails as domestic ones are doing the job well.
Independent stores will close, leading to unemployment.
Profits will go to foreign players.
The Govt has not built consensus.
Indian cities will look like their Western counterparts and morality may go down the drain.

On the positive side, Retail can boost the farm sector.