Argument against allowing FDI in retail. (The Calcutta Telegraph, Thursday 1 December ,2011) 1.

FDI in retail may result into Indias re-colonization as East India Company did. 2. cause the closure of and hardship to the owners of mom-and-pop stores, 3. It will lead to unemployment as the self-organized retail sector that is likely to be driven out which currently employs 40 million people. 4. The foreign retailer may practice predatory pricing to drive out smaller retailers and gain market dominance which will hike prices to fleece consumers. Eg:- Pepsi and Coca Cola did in India. 5. Foreign retailers will fill their shelves with imported goods, which will hurt Indian manufacturing sector. 6. Foreigners will repatriate the profits and this will impoverish India. 7. More, retail trading is what which Indians are doing for centuries they can do it themselves.

Counter Argument for FDI in retail. December ,2011)

(The Calcutta Telegraph, Thursday 1

1. First, 2011 is not 1612. India is not divided into sultanates that can be played off one against the other. Indian strategic strength is as good as or better than that of the retail traders countries of origin, except for the United States of America.(

2. Second, small format neighbourhood stores have stood competition from their larger peers very well during the past decade. Spencers, Trends, Big Bazaar, all have entered retail space and are being given a run for their

money. Large and small stores co-exist as consumers patronize both to meet different needs. There is no reason to believe that the entry of foreign retailers will lead to a vastly different outcome. 3. It is estimated that the retail market will grow from the present size of $490 billion to nearly $1 trillion in the next 20 years. During this time the share of large retailers, including foreign ones, is expected to increase from current 4 percent to 16 per cent. That still leaves 84 per cent of the retail market to small stores, implying a market of $840 billion for them. Finally, foreign stores are being permitted only in metropolitan cities. There number is 53 now and may become 76 by 2030, still leaving a huge market for the small stores. 4. With 84 per cent of market share still remaining with small stores, there is no question of large-scale unemployment. Besides, large-scale retailers will generate higher quality employment. Some 70% of Indians are associated
to farming, but the extent of disguised unemployment in Indian agriculture is very huge. Many farmers work in the countryside on small, unproductive tracts, earning minimal income, and are heavily in debt. Organised retail will absorb some of this labour force in better-paying jobs. It is common to see small shops employ workers without proper contracts, making them work long hours, not permitting them to join unions. Many shops depend on child labour. A well-regulated retail sector will presumably curtail some of these abuses. (http://www.guardian.co.uk/global-development/poverty-

matters/2011/nov/29/india-needs-foreign-owned-supermarkets,
India an export hub". Business Standard. April 14, 2010

"Walmart Asia to make

5. Predatory pricing can be practised only by monopolies and foreign retailers will not enjoy market dominance. Indian competitors apart, there will be a number of foreign players, many with Indian partners, competing for market share. This combined with the monitoring of the Competition Commission would suffice to rule out predatory pricing practices. 6. Further, it will be difficult for foreign retailers to find cheaper imports across the board. But this fear of domestic manufacturing capacity being wiped out could be better alleviated by putting a cap on the share of imported products to be sold by large format retail stores as done in the

case of Singlr brand retail where govt. wants 30 goods should come from domestic SMEs and Cottage industry( Press Note No.1 (2012 Series), Ministry of Commerce. Because of our membership of the World Trade Organization we have to offer national treatment to all businesses, so we cannot impose this condition only on foreign stores. Retail trade does involve scale, infrastructure development and logistics and supply chain management. Some critics say India doesn't need foreign companies. But that can
apply to almost every other sector in the country. From its independence in 1947 until 1991, India attempted to be semi-self-sufficient, during which its economy grew at an abysmally low rate, making no difference to the level of poverty(. (http://www.guardian.co.uk/global-development/poverty-

matters/2011/nov/29/india-needs-foreign-owned-supermarkets,
India an export hub". Business Standard. April 14, 2010)

"Walmart Asia to make

7. Finally, there is hardly any reason to believe that foreign investors will forgo the opportunity to expand capacity in India by reinvesting their profits here instead of repatriating them. And even if they do so, our main concern should be to generate jobs. FDI will help do that. More than 300 million people will move into urban centres in the next two decades. The present retail format cannot cope with that scale of demand. The traders associations and their leaderships, largely political, are encouraging the misgivings