Governement Firms Stance on FDI in Retail

Guess the discussions have been very sidelined so far following the story on the governments decision on Foriegn Direct Investment (FDI) in Retailing. In all parity, the present National Democaratic Alliance is all set to come back in power according to many polls apart from my own view. The government has firmed its decision to open FDI in Retailing to the extent of 26%.

Taking an extract from the Business Standard newspaper reporting the article its rather funny to use such an quote for justification of opening up FDI.

"The 26 per cent FDI limit in insurance also would be revisited, he said. Dismissing notions that foreign retail brands would dislodge Indian brands from the market, Singh said the NDA was considering only 26 per cent FDI and not handing over the entire retail trade. “The Indian sherbeth is still there despite Coca-Cola and Pepsi. Our experience is that the Indian brand has great strength,” he said. "

Well I can run around the corner to about ten stores from my home in a typical neighbourhood and ask for a coke or a can of pepsi, and I'm sure to be able to buy the same, all chilled and fresh. While I doubt if any of ten stores stocking "The Great Indian Shebeth". I'm sure most of you would agree in my view and much is said in that little statement.

Well no arguements from me regarding opening up FDI in Retailing or any other sector. I don't see much protection for the local trade in competing with global giants. The only possibility is if the government really restricts the amount in % of investment through direct and indirect holdings. That has it owns loopholes. Which grocery chain in India can compete against the US$260 Billion Wal-Mart. It has the capability and strength to estabilish itself even in a country like India.

While the arguement goes on, just though I should share the news on the governments stand. Guess we can all from any angle see the difference soon in the markets. Only issue to ponder on at the moment is to think about when the government is going to pass this and really see the investment flowing in.