FDI in Retail to Benefit Indian Farmers

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FDI in retail to benefit Indian farmers,

citizens, says US

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Del.icio.us ApnaCircleThe author has posted comments on this articlePTI | Dec 9, 2011, 11.14AM ISTWASHINGTON: Supporting the ongoing discourse in India over the issue of FDI in the retailsector, the United States has said even though it is of view that this is in the benefit of India, itwould desist to comment on India's internal affairs.

"I think they have to work through their domestic political process and I don't want to commenton their internal affairs at this point," the Under Secretary for Economic Growth, Energy, and theEnvironment Robert D Hormats told reporters at a news conference.

Responding to questions about the decision of the Union Cabinet to put on hold its decision withregard to FDI in the multi-brand retail sectortill the time a consensus is developed among all itsstake holders, Hormats said that the United States has been discussing the issues with India forsome time.

"The Indians are working it through their process. I think the Indians know our position. Theyknow the benefits that we think would result from allowing this multi - brand retailing to takeplace in India," he said.

"I think they(India) know our view that it would be very beneficial to Indian farmers, Indiancitizens, Indian consumers in general.

"But the details of how the Indian Government and the Indian Parliament and the Indian officialswork this through, I think I'll leave to the Indians and not try to advise them on how to proceed,"he said.

Later at another news conference, State Department spokesman Mark Toner asserted that this isa "domestic Indian issue" and it is not for the US to comment on it.

"We understand the government's decision to allow time for a consensus to be forged. You


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know, we believe that this is a deal that's in both our countries' interests," he said.

"I'm neither happy nor disappointed," Toner said when asked if the US is disappointed with thedecision of the Indian government to put on hold FDI in retail.

"The debate that's going on now in India is similar to debates over economic policy in the UnitedStates. It's a domestic debate right now. We're very clear in our position. This is good for bothour countries. We believe it should go forward, but, you know, we'll allow that debate to play outin India," he said adding that the Indian government knows how the US feel about this.

"Look, they have their democratic system. This is how a democracy works. These big policydecisions need to be vetted and agreed upon and reached through political consensus.

"That process is playing itself out in both regards and we're going to let it do so," Toner said. PTIFEATURED ARTICLES

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sunil kumar (punjab)13 Jan, 2012 01:59 PMif indian govt. applied 100% fdi in retail sectors , then agriculture department may go lossbecause of above 60% inputs comes from the agriculture department.

Agree (0)Disagree (0)Recommend (0)Offensivemsrgnk (farakka)04 Jan, 2012 05:57 PMFDI is really very useful for indians but i dont understand why politicians are refusing ....i thinkthe reason behind this is that they r corrupt...!!

Agree (0)Disagree (0)Recommend (0)Offensivearti (bhubneswar)20 Dec, 2011 12:31 AMi think fdi in retail thats too 51% is not suitable for country like india .india needs alot of internaldevelopment ,moreover our pollitical systemare corrupt it might bring a situation of preindependence day

Agree (1)Disagree (0)Recommend (0)Offensiveuday shah (Navsari-Gujarat)13 Dec, 2011 09:34 AM

Americans have seen through our Corrupt Political System. Indian Farmers are not goingto be benefited because of our own Robber Politicians.On the contrary Common Indian men willhave to pay for FDI Demons from their own meals in Partnership with our Netas. Its a Good thatParliament have rejected this move.

Agree (7)Disagree (1)Recommend (0)OffensiveHonestOne (Earth)11 Dec, 2011 06:12 AM


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Well its nor good for India to open up for Fdi in retail. India has its own synthetic of retail andbuying is a cultural practise for us. Wal mart will kill the local retailers. They will force thefarmers to produce what they want (that's wat the British did) . They will eventually kill amillion jobs and create thousands. This is probably why the govt was hurrying the decision , sothat they can get a bigger share. But Alas, the others came in for theirs. We Indians need Fdi in

technology and production industries. Retail giants will just plunder the wealth. Wal mart hasproved to be dangerous in emerging countries. Not just Wal mart even Carrefour or Tesco.

Agree (7)Disagree (2)Recommend (0)OffensiveDeepesh Chauhan (agra)09 Dec, 2011 08:46 PMindia have allowed fdi to invest 51% business in india beforesome it was 48% like it

percentage of will incress day by day after few year the forigners will hold intire country before1947 they came in india for business n they control the whole india

Agree (2)Disagree (3)Recommend (1)Offensive4thaugust1932 (Tokyo)

09 Dec, 2011 06:51 PMIndian regime delayed/denied FDI in Retail to promote/protect Forward caste hegemony in thesebusinesses. 90% of corrupt money is with the Forward caste leeches. Tell them to take their casteshare of land FC(5-15%), BC(50%), SC/ST/MC(35-45%) from India and build their ownnation.Google "Communal Award". (2011) Black Money in Swiss banks = $1.4 trillion (FC)Goa mining scam = $700 million (FC) Noida Corporation farm land scandal = $40 million (SC)Bellary mines scandal = $3.2 billion (FC) BL Kashyap EPFO Scam = $118 million (FC) HasanAli Khan = $8 billion (MC) ISRO-Devas = $300 million (FC) Cash-for-votes = $715,000 (FC)(2010) 2G spectrum scam/Radia Tapes = $6.9 billion (BC) Adarsh Housing Society (FC)Commonwealth Games = $15.5 billion (FC) LIC Housing Loan scam = $200 million (FC)Belekeri port = $12 billion (FC) Lavasa = $80 million (FC) Uttar Pradesh Food Grain = $44

billion (BC) APIIIC = $2 billion (FC) IPL Cricket = $8 billion (FC) (2009) Madhu Koda = $800million (SC) UIDAI = $1 billion (FC) Vasundhara Raje land scam = $4.4 billion (FC) (2008)Satyam = $1 billion (FC) (2006) Scorpene Deal = $10 million (FC) (2005) Oil-for-foodprogramme (Natwar Singh) = $10 billion (FC) (2004) Gegong Apang PDS = $200 million (ST)(2003) Taj corridor = $44 million (SC) (2002) Kargil Coffin (MC) (2001) Ketan Parekh = $200million (FC) Barak Missile = $200 million (FC) Calcutta Stock Exchange = $2 million (FC)(1997) Cobbler scam = $214 million (FC) Sukh Ram = $5 million (FC) SNC Lavalin = $10million (FC) Advani Hawala = $18 million (FC) (1996) Bihar fodder = $211 million (BC) C RBhansali = $200 million (FC) (1995) Telgi scam = $4.46 billion (MC) (1992) Harshad Mehta =$800 million (FC) (1989) Bofors = $400 million (FC) (1971) Nagarwala = $1 million (FC)Haridas Mundhra = $10 million (FC)

Agree (0)Disagree (2)Recommend (0)OffensivePrashant Goyal (Delhi)09 Dec, 2011 03:23 PMUS is favouring because WalMart pays 35% of amount earned to US govt. Second , in whichever country FDI in retail happened, initially prices dropped to remove local retailer and thenincreased so high that it made that country economy fragile. Third, the major truth is that even


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US has banned WalMart in its own country to safe guard local retailers. So, you can understandwill it benefit in long time or not.

Agree (6)Disagree (4)Recommend (0)OffensiveFDI WOULD BE A GOOD DEAL FOR INDIANS (facebook)09 Dec, 2011 01:37 PMevery movement has its music, thrill, trend, n more over learning experience. I THINK, FDI willbring a new change in our country like INDIA.

Agree (4)Disagree (5)Recommend (0)OffensiveNaveen (pune)09 Dec, 2011 01:36 PMDear Robert D Hormats why dont you better worry about Obamas public hairs & US fallingeconomy rahter than poking your (corrupt having share in FDI's) dirty nose in India's domesticmatters???

Agree (3)Disagree (4)Recommend (0)Offensive

indian aam admi (kerala)09 Dec, 2011 01:11 PMDear USA do not try to punish our people for your financial dissaray.Your companies can makemoney by exploiting Americans and not by stealing Indian aam admi.

Agree (4)Disagree (6)Recommend (0)OffensiveAshish (Pune)09 Dec, 2011 01:11 PMIf it is benificial to farmers in long run then why US is providing large amount of subsidies tofarmers. Although they are having FDI in retail from long time.

Agree (2)Disagree (1)Recommend (0)OffensiveS.M. (UP)09 Dec, 2011 01:08 PMSo kind of Uncle Sam not to poke its nose in India's internal affair. But haven't they done italready? It brings tears to the eyes of the people (and of course death to millions all over theworld since the second world war) to witness the world-wide charity mission of US!

Agree (2)Disagree (1)Recommend (2)OffensiveSunil (Bangalore)09 Dec, 2011 01:06 PMLetting American MNC's in India is something like bailing them out. they will squeeze our

economy... Indian govt. should plan the raiders carefully & should restrict FDI below 40% in theinitial phase..

Agree (4)Disagree (2)Recommend (1)Offensivebsb (delhi)09 Dec, 2011 12:41 PMpl wait US once our Amar singh start attending parliament we will pass FDI bill, he is sick , cantdo anything , he only know how to pass the bills, sorry wait till the holding period is over


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Agree (2)Disagree (0)Recommend (1)OffensiveDilip (Chicago)09 Dec, 2011 12:37 PMThe FDI retail may be great but what about the politicians and senior babus. These MMCs willbe too honest and hard to corrupt. If there are no benefits to netas and babus, changes will notcome. Everybody understands that, including the Congress, the most corrupt. They are asking,what is in for me. The current system is quite profitable for them.

Agree (6)Disagree (0)Recommend (0)Offensive7bsb (bhatinda)09 Dec, 2011 12:35 PMAMERICANS, WE WOULD HAVE DONE THIS ALLOWING FDI IN INDIA, BUT OURAMAR SINGH IS NOT DOING WELL, MORE OVER HE IS UNDER BAIL, ONCE HECOMES TO LOKSABHA IT IS POSSIBLE. PL WAIT, THANKS

FDI in retail: Walmart, Carrefour, Tesco may

face hurdles in 28 citiesPTI Nov 25, 2011, 09.05pm ISTTags:

y walmart|y Tesco|y FDI in retail|y Carrefour


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y

NEW DELHI: Global chains like Walmart, Carrefourand Tesco may face problems in opening stores in over half ofthe 53 cities eligible for FDI in multi-brand retail.

The parties and alliances ruling in 11 major states with 28 cities, have strongly opposed the decision of the Centralgovernment to allow foreign direct investment (FDI) in multi-brand retail which is dominated by small traders.

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According to 2011 Census, there are 28 cities in 11 states ruled by the parties opposed to the decision. These includebig cities like Bangalore, Kolkata, Ahmedabad, Patna, Allahabad and Bhopal which have over one millionpopulation, the threshold set by Cabinet while approving FDI in retail.

Excluding Punjab, BJP and NDA rule in eight states, including Madhya Pradesh, Gujarat, Karnataka, Chattisgarh,Chennai, Coimbatore, Jharkhand, Uttarakhand, Bihar and Himachal Pradesh.

While the Centre has permited FDI in retail, it is up to the states to grant trade licences under their respective shopsand establishment Acts. BJP indicated that states where the party is in power may not permit foreign stores.

Asked specifically, senior BJP leader Murli Manohar Joshi said "not only the BJP-ruled states but even states whereCongress is in power should oppose them."

Bihar Chief Minister Nitish Kumar has vehemently opposed yesterday decision to allow 51 per cent FDI in retailsaying "it will ruin the retailers and lead to a point of unemployment".

The parties which have aired their resentment include BSP ruling in Uttar Pradesh, Trinamool Congress - WestBengal and AIADMK in Tamil Nadu.

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The government may be adopting a yo-yo approach toopening foreign direct investment in multi-brand retail, butindustry captains at the India [ Images ] Retail Forumsaid foreign direct investment should be opened upimmediately, given the liquidity crunch in the market.

"If FDI is to be allowed in multi-brand retail, it could not comeat a better time than this. It would certainly help in acceleratinggrowth," said Thomas Varghese, chairman of the Confederation

of Indian Industry's national committee on retail and chief executive officer of Aditya BirlaRetail.

Kishore Biyani, group chief executive officer of Future group, said, "FDI will be a game-changerfor Indian retail, but an even bigger boost will be the GST (goods and services tax), which I seegetting implemented in 12 to 18 months."

"The benefits from FDI in retail are clear and it's high time it is opened up," said Rajiv Kumar,secretary general of the Federation of Indian Chambers of Commerce & Industry.

He said Brazil [ Images ] and China had seen significant improvement in tax collection andemployment after FDI was opened in retail. Global retailers such as WalMart, Tesco andCarrefour export goods worth $60 billion from China every year, according to him.

In India, these global retailers exported goods worth $725 million in 2010. Modern retailconstitutes 6.5 per cent of the $435-billion overall Indian retail market.

Bijou Kurien, president and chief executive, lifestyle, Reliance [ Get Quote ] Retail, said foreigncapital would help domestic retailers with growth capital, technical knowhow and skill sets,among other things.

"Funds are available domestically, but they are available to the extent of money needed by ourretailers. That is why we need strategic investors, foreign funds or private equity investors," saidKurien.

According to Abheek Singhi, partner and director, Boston Consulting, Rs 7,800 crore (Rs 78


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billion) came after FDI was opened in cash and carry wholesale trading in 2006, while fundsworth Rs 300-900 crore (Rs 3-9 billion) came in after FDI was allowed in the single brand retail.

But retailers such as Ajit Joshi, chief executive of Tata-owned consumer durable and electronicschain Croma, said given the recession in Western markets, international retailers might not be

too eager to put in money elsewhere.

"There is a recession in the US and Europe. Are they (global retailers) ready to write big chequesgiven the problems in their home markets. They will look at setting their home markets rightbefore venturing out," Joshi said.

"Indian IT (information technology) majors such as TCS [ Get Quote ] (Tata ConsultancyServices), Infosys [ Get Quote ] and Wipro [ Get Quote ] are supporting IT systems of overseasretailers. I do not think it is correct to say FDI will bring in technical know how."

Croma has a tie-up with Australia's [ Images ] Woolworths for sourcing and logistics.

Raj Jain, president of WalMart India and managing director and chief executive officer of BhartiWalMart, said looking FDI only as a source of capital was wrong.

"None of the retailers will become successful unless they invest in their back-end significantly,which will reduce wastages, inefficiencies and reduce prices," he said.

Economy

A guide to FDI in retailHindustan TimesNovember 29, 2011First Published: 21:23 IST(29/11/2011)Last Updated: 12:20 IST(30/11/2011)

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So, whats the fuss all about?

The government has decided to open up the retail sector to global investors through foreigndirect investment (FDI) in multi-brand retail with a ceiling of 51%, and 100% FDI in single-brand retail.

What does it

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mean?

It means that global retailers such as Walmart, Carrefour, Tesco and others can set up megadeep-discount stores in the country through joint ventures with Indian firms, where the foreignpartner can hold up 51% equity.

But Walmart, Carrefour and Metro already have stores in India, dont they?

Yes, but these are wholesale cash-and-carry stores where only institutions or kirana shops canbuy not consumers.

What about single-brand retail?

Single brand retail companies such as Swedish furnishing giant Ikea or sporting goods andequipment major Reebok can set up stores of their own in India through their own subsidiaries.Till now they were required to set up stores through joint ventures in India that allowed theforeign partner to own up to 51% equity.

Has the government set any conditions for allowing FDI in retail?

It has come with a string of conditions. At least half of the FDI should be made in back-endinfrastructure such as cold-chain and warehousing, the minimum FDI in any multi-brand retailproject should be $100 million (around Rs 500 crore), state governments can prohibit FDI in

retail in their states if they wish to, stores can be set up only in cities with a population of at least1 million, and at least 30% of the value of manufactured items procured should be sourced fromIndian small and medium enterprises.

Why is there so much of opposition about the decision?


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Opposition parties and small traders are worried that large deep-discount stores of transnationalcorporations will drive street vendors and neighbourhood mom-and-pop kirana stores out ofbusiness endangering their livelihood.

Will kirana stores business be affected?

Unlikely because large deep discount stores cannot offer the convenience and loyalty ofneighbourhood kirana stores who are available at the customers beck and call, literally.

How will the farmers benefit from organised retail?

FDI in retail will ensure procurement, at least of fruits and vegetables directly from farmersoffering them higher income. At present, the price that a farmer gets for a kilo of onions is abouthalf of what it is sold to by vendors and retailers to final consumers.

What about small and medium enterprises?

By engaging local producers, organised retail provides them with an access to a much broaderconsumer set. For instance, a leading retailer operating in north India has engaged a local picklemanufacturer in Amritsar and invested to upgrade its equipment.

What about consumers?

Organised retail provides higher quality of goods on account of the predefined and stringentstandards adopted by the retailers. And of course the price will be cheaper. Studies have shownthat consumers, on an average, will save at least 10% on daily use goods.

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FDI in Retail to Benefit Indian Farmers

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