Retailing in India is one of the
pillars of its economy and accounts for about 15% of its GDP. After Agriculture
it largest sector, which employs the largest number of people in India. The
Indian retail market is estimated to be US$ 450 billion or 2, 34,952.20 Crores
and one of the top five retail markets in the world by economic value. It is
estimated that there are around India's retail organized industry, employs
directly about 40 million Indians (3.3% of Indian population) or 4 Crore people with around 1.3 Retails
organized outlets in India. If we include the unorganized sector and the
employees of organized sector and their dependents this figure will sour to
above 20 Crores peoples. . India has about 11 shop outlets for every 1000
people. The organized retail market is growing at 35 percent annually while
growth of unorganized retail sector is pegged at 6 percent. Organised retailing,
absent in most rural and small towns of India in 2010, refers to trading
activities undertaken by licensed retailers, that is, those who are registered
for sales tax, income tax, etc. These include the publicly-traded supermarkets,
corporate-backed hypermarkets and retail chains, and also the privately owned
large retail businesses. Unorganised retailing, on the other hand, refers to
the traditional formats of low-cost retailing, for example, the local mom and
pop store, owner manned general stores, paan/beedi shops, convenience stores,
hand cart and pavement vendors, etc.
India has topped the A.T.
Kearney’s annual Global Retail Development Index (GRDI) for the third
consecutive year, maintaining its position as the most attractive market for
retail investment.
Foreign
retailers have already started operations in India through various routes: (i)
joint ventures where the Indian firm is an export house; (ii) franchising (eg. Kentucky Fried Chicken, Nike); (iii)
sourcing of supplies from small-scale sector; (iv) ‘cash and carry’ operations
(Giant in Hyderabad, Metro in Bangalore)3; (v) non-store formats – direct
marketing (Amway). Large international retailers of home furnishing and
apparels such as Pottery Barn, The Gap and Ralph Lauren have made India one of
their major sourcing hubs. Up to 100 per cent FDI is allowed in ‘cash and
carry’ operations. The Great Wholesaling Club Ltd is one such example. In
February 2002, the world’s largest retailer, Wal-Mart, opened a global sourcing
office in Bangalore. In November 2006, it announced its entry under a joint
venture with the Indian corporation Bharti.
Economist Mohan Guruswamy of the
Centre for Policy Alternatives warns that companies like Wal-Mart, Tesco, and Carrefour will serve only to elite
Indians. The average Wal-Mart store will displace 11,200 people and replace
them with 285 people.
Throughout the world it is known
fact that huge investment is not required to open a retail shop. Investment is
required to build infrastructure for shop, sophisticated technology is not
required in retail trade. Small retail
shops provide more employment then large chain of Retail stores. Big FDI Companies, instead of developing under
developed areas these stores capture prime commercial property in cities. If
allowed in India they will first buy good from producers in bulk and sell it at
less margin and hence routing out small traders from trades. When small traders
are out then they will monopolise the trade and charge exorbitant price for
goods and commodities. Independent stores will close, leading to massive job
losses. Walmart will lower prices to dump goods, get competition out of the
way, become a monopoly, and then raise prices. A typical Walmart store sells
60,000 types of things. We have seen this in the case of the soft drinks
industry. Pepsi and Coke came in and wiped out all the domestic brands. India
doesn't need foreign retailers, since homegrown companies and traditional
markets may be able to do the job. Work will be done by Indians, profits will
go to foreigners. Remember East India Company. It entered India as a trader and
then took over politically and ruled for over 200 years. More than 50 such
companies are entering into India and they will control first economically then
politically. Experience in Developing Nations as Brazil, Argentina etc. has
shown how these Companies have damaged their Economy and made them
Bankrupt. Righty the NDA has called for
a Total closure i.e. the bund in the whole if India.
