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Showing posts from December 4, 2011

Why is the Indian Consumer Being Shortchanged? - An Opinion on Retail FDI

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On November 24, the Union Cabinet decided to permit 100% foreign direct investment (FDI) in single-brand outlets and 51% in multi-brand stores. The opposition as well as some allies of the UPA have been vehemently opposing the decision, saying it would affect the small shopkeepers (kiranas), demanding a reversal of decision.


India has been known as the nation of shopkeepers, for every 1000 people there are 11 shops, and these shops include the paanwallah, sabziwallah, the barber etc. Unlike other nations which have densities of around 5 (UK and USA), the Indians are serviced far better by the neighbourhood store. According to a study by industry body FICCI, the total retail trade in India was worth Rs 11,00,000 crore in 2003. Of the approximately 12 million retail shops, 96% occupy floor space of less than 500 sq ft.


With over 120 crore consumers India is a land of opportunity, modern trade has only tapped 5% of the business. This is just a start. 


The proliferation of the neighborhood s…