With low consumption and other recessionary conditions, there is already pressure on retail sales and retailers. Opening up the market to foreign direct investment (FDI) would exert further pressure. In the past, the government invited foreign investment in cases where local markets were underdeveloped or where large amounts of capital were needed, like in infrastructure development.
In the case of retail, neither is large capital needed nor is the market competition inefficient, so what benefits does FDI hold for the Indian retail market? The government must consider the benefit to consumers, loss to small retailers, unnecessary pressure on real estate prices and mass agricultural captive farming. Before changing the competitive landscape in retail, it should also detail what steps it has taken to protect the interests of local kirana stores. In any case, local kirana stores have built up a healthy consumer market without government support over the years. Is there something in the future for them?
Ashish Agarwal, New Delhi
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