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Showing posts with label Foreign Direct Investment. Show all posts
Showing posts with label Foreign Direct Investment. Show all posts

Sunday, February 9, 2014

Allow IDI instead of FDI

Foreign direct investment in which foreign entities invest their money in Indian markets like Food, Garments, and Cosmetic etc. and is welcomed by Indian govt because of it’s featured advantage. Supply chain required by consumer market has different layers and the efficiency among different layers is increased by implementing proper policies and rules. Central Govt has already approved 51% FDI in multi brand retail which attracts foreign players to invest in India. And study suggests that FDI will bring millions of jobs, money inflow in India and tax collection.

Domestic players are afraid of loosing their ownership to Foreign players. The FDI culture which is coming in India will discourage those emerging domestic players. And it will end totally that Kirana shop culture. Their customer base will be shifted to those Foreign Players. Since it is financed and managed by foreign players so our government will have little control or say no control.
Taking advantage of consumer base, in India, starting an small business seems an easy option but if FDI is allowed then it will also be vanished. Since India is a biggest consumer market after china hence it seems attractive for many foreign players. But should they be allowed at the cost of small and medium business. Allowing FDI means somewhere we are becoming financially dependent on some other country.
Instead of allowing FDI (foreign direct investment) why do not allow IDI (Indian direct investment). In India also, There are many big players who can establish their own chain of super markets. Single brand retail FDI which is already approved and now they are trying to approve multibrand retail FDI if it is also approved then it will not be Indian retail sector rather it would foreign retail sector. Moreover everything (labor, service, raw materials) would be offered by India and profit which will be generated will be given to those foreign players.
Govt and some other study suggests that FDI will reduce the price of product being sold .This FDI scheme will just do selling and nothing more than that then how can they provide the product at cheaper rate than those selling in a small shop. Wherein these supermarket chain would incur cost in many more thing like infrastructure cost, employee wages, taxes and many more and this cost will be pushed on to consumer only. On the other hand a shop keeper has nothing to do with such things and this saved cost can be transferred to consumer in terms of cheaper prices.