Well its always an interesting topic that can tick anyone. With the Government up to its usuals in trying to protect the public by raising fresh concerns of FDI in Retail with specific concerns in respect to Wal-Mart, I can not help but wonder in awe.
This must be the most debated subject by the Government for years now and it just never seems to stop. The ruling Government, Congress, has raised fresh concerns on how FDI in Retail and entry of Wal-Mart with a tie-up with Bharthi could affect the aam admi - Government's slang for Common Man
The debate already raised a month ago questioned the legality of the entry of Wal-Mart which the Commerce Ministry had given a clean chit. More so the route that Wal-Mart is entering India is not the first with many others like Germany's Metro Group, Australia's Woolworths, etc already in the country.
The same Government that allowed FDI in Retail for single brand stores and started this new wave of debate is questioning itself.
But what the irony of all this is not the Governments concerns and care for the common man, but rather the market situation of the existing trade. When there are Indian Companies investing US$ 5 Billion + and talking about rolling out over 2000 stores across the country across categories, etc like Reliance Retail, which is one of the extremes and many others industrial groups like Essar, Bharthi, Videocon, Tata, Rahejas etc which are just a few to name, how come the government has no concern what these industrial groups can do to the common man. Its no doubt that with companies with deep pockets like Reliance can do to the local trader.
The new wave of Retail Chains have already affected the common trader and its impact is yet to be felt. Whilst the Government keeps a closed eye, intent or no intent, its ironical that the Government raises debates about banning or restricting International Retail Chains. What took Wal-Mart 20 years to do, Relaince is trying to outdo in 3 to 5 years. Wal-Marts Retail Floorspace is 600m Sq.ft. and US$ 300 in 45 years while Reliance is attempting to cover 100m Sq.Ft. in 3 years with US$ 25 Billion. Now should't the government keep a watch on its own kind?
No one can stop FDI. Its the future.
One should understand RED Queen Principal of competition.
Its ultimately for good. Also it will improve suuply chain and processes.
Posted by: New Risk Consultants | Saturday, 24 February 2007 at 07:35 PM