The adverse impact of the FDI would befall the unorganized retail sector with great intensity if the State makes more stringent rules of zoning and regulation. I have been researching the local weekly markets of Delhi for the past three years. These markets are very prominent feature in all parts of Delhi and NCR. There are around twelve hundred weekly markets of which only one fourth are recognized by the Municipal Corporation of Delhi consequence of zoning.
Approximately 2. This figure would just double if we take in to account additional employment that is created around these markets. Various own account and household enterprises are producing commodities on a daily basis for such low end markets. Local weekly markets provide a very easy channel of distribution of commodities produced not only in local small scale industries but also in the neighbouring States. For instance, rubber chappals and shoes made in Agra, sarees made in Surat, hosiery made in Coimbatore, woollens made in Ludhiana are all sold at affordable prices here in these very markets.
Retail Industry in India
FDI in multi brand retail would either displace various wholesale markets or the size of such markets would shrink. Today the local markets run on capital which has a fluid or floating nature. But with the coming of multi brand retail stores this floating capital would freeze and small retailers and vendors will be evicted from the market.
It is argued by the government that FDI in retail would create employment opportunities.
But employment for whom is the crucial question? It would create employment for those who are educated and have professional experience.
Taking cue from my observation in the weekly markets of Delhi I would argue that majority of those now employed in these markets have minimal education and have no professional degrees apart from their marketing knowledge. Now if FDI in multi brand retail comes, it is not in any way going to benefit these traders if they lose their sole means of survival. I have observed in the course of my research that through weekly markets of Delhi hundreds of people have employed themselves who were displaced for one reason or the other.
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At the same time it has created a distinct market for lower middle class who would not go to a super market or a mall for shopping. Where will this section of population shop for daily needs with the entry of multi brand retail outlets in case it leads to the displacement of weekly markets? Often these are characterized as unlawful, black, or hidden activity.
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It is my contention that in order to make way for the private capital the State might evict street vendors, cancel their licenses, or remove tehbazaari rights for weekly markets in the times to come. Just as in Delhi, Mumbai, Bangalore and other metropolitan cities, the State, has from time to time uprooted slums and relocated them to the periphery of the city, to make way for the investment by private corporate builders in order to make the city slum free.
Similar decisions if taken for the unorganized retail sector would gravely increase inequality and poverty. Email: suvratachowdhary gmail.
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FDI in Retailing - Fibre2Fashion
Comparison of the Indian and Chinese economy. Drawbacks and benefits of increasing FDI in retail in India. Research article writing Research article writing service by experienced and highly qualified writers. Each retail giant is expected to open atleast 15 stores across India and to open each store it may require 15 million dollars which can total in billions of dollars in Forex reserves.
Thus it will become critical to save a lot in storage and logistics. The perfect example is the existing cash and carry model in Punjab. References U. Greyhill Advisors. Abhinash Jena Partner at Project Guru. Abhinash has worked in sales, branding, and marketing functions for GPS companies including MapmyIndia Navigators www. Hire us for your research in International Business.