As was being expected Prime Minister Dr. Manmohan Singh is adamant to open the Indian retain market to the foreign direct investment despite of the oppositions of whole of the country. Under his leadership the UPA government has taken the decision of FDI in retail market even without consulting its allies in the government as well as the opposition parties. They have decided to allow the foreigners investors for 51 per cent FDI in multi-brand retail. With it, the government has opened a back door for the foreigners to conquer the entire Indian retail sector by allowing 100 percent FDI in single brand retail.
It will be a golden chance for the foreigner Trade corporations to enter into the Indian retail market. These corporation are very powerful and have huge annul turnovers. The power of these retail trade corporations can be felt only in those markets where they do business. These corporations have their branches almost in the entire world . Some of them are Nietherland’s Ahold, Carrefour of France, Metro of Germany, Tesco of UK and Walmart of USA. These corporations have a common tendency of establishing their own control over the entire chain of buying, transport, storage and the selling to the customers. Local tradesmen cannot stay in market as their competitors because of their huge wealth and approach. They slowly disappear from the market. This does not happen only in large cities but also affects the villages. When these corporations wipe out the small traders from the market then they don’t have much competition. At one hand they have every kind of manufacturers, small and large, and at the other hand these corporations the only buyers.
In these circumstances these firms establish a strong relationship with the manufacturers which directly affects the economy. At one hand there are a large numbers of manufacturers and on the other hand a few or only a single buyer. The manufactures don’t have any direct link with the customers and thus have no other option rather than to sell their produce to these trade corporations and they sell the material to the customers in the retail market. Thus at one hand a large number of manufacturers and a single buyer and on the other hand a single seller and uncountable number of customers. These circumstances create a new opportunity to the trade corporations to increase their profit. They can buy the goods from the manufactures at very nominal prices and sell them to the customers at high rates. If these firms share their profits with the customers or their manufacturers then it, too benefits the firm as it controls all of the chain from production to selling in retail market.
With it the profit of small scale manufacturers decrease as they have a very few options to sell their produce. These small scale production units include the farmers and the handicrafts men. Indian agriculture and handicraft is already under great pressure. Farmers are doing agriculture because they don’t have other work to do. In this situation, FDI in retail will adversely affect the employment creation. In long-term these retail market giants will have their full control over deciding the prices of the goods. Thus government will be at their feet to put some check on the rising prices.
FDI will steal jobs from thousands of Indians. These unemployed people will include small scale retailers, shopkeepers, middlemen, wholesale dealers and the middle level shopkeepers. Because the foreign trade corporations have huge amount s to invest in the market, they establish direct link with the manufacturer. It will steal jobs not only from the middlemen and the traders but will also snatch jobs from the transporters. According to a survey conducted by a national agency, more are 40 crore people of India are working or are employed which includes almost 5 crore(50 million) employed in the retail market. In short we can say that there is a tendency of uncertainty in the Indian retail market as for as the employment is concerned but it is one of the main field that creates innumerable employment opportunities for the Indians.
Government parrots are propagating that FDI in retail market will not adversely affect the employment but will create thousands of jobs. Most of the government sources are speaking in the line of foreigner trade giants. They reinforce their words by using manipulated numbers. There are many associate work opportunities that keep even the families of the small tradesmen employed. Thus the number of indirectly affected people will be much more as compared to the directly affected.
This direct foreign investment in the Indian retail market will not benefit the Indians in any way. Neither it will bring any new technique with it and nor it will create any new kind of job opportunities. With the passage of time, Indians will become servants of the foreigners on their own land. To defend the FDI policy, Minister of trade and commerce, told that UPA’s FDI policy in retail market has its own kind of uniqueness. According to one of the sanction the trade corporation will have to buy at least 30 per cent of its material from the small scale industries. But it has not been mentions that from where this 30 per cent material will be bought? Whether it will be bought from Indian small scale industries or from out of India? If it is bought from within India then how it can be determined that this or that materials has been bought from an Indian small scale industry. Is there any kind of certificate issued by the Indian government which determines that this or that production unite is a small scale industry. There are innumerable loopholes and puzzles of words in the FDI policy in retail market that can be used by the foreign trade corporation for their advantage. There is no doubt that these government rules will be hugely overlooked by the trade corporations. Bald-headed notes can change the character of any one. And when these trade corporations are about to force their entry into the Indian retail market with the sheer use of money then who can assure that they won’t violate the terms of trade mentioned in the FDI policy with the use of money power. In short we can say that UPA government’s decision to give green signal to the FDI in retail market is a decision taken under pressure and in great haste and no one can prove it a right decision.
There is no doubt that UPA government is under tremendous pressure because of rising prices since it returned to the power for the second time. FDI in retail market is not the whole and sole method to control the rising prices. Strengthening of public distribution system and with some government attention towards the investment and production can definitely put a check on the rising prices. Indians, especially the tradesmen neither will accept the foreign direct investment in the Indian retail market nor they will allow the foreign trade corporations to enter into the Indian market. If anyone has doubt about this fact they they should remember the Ambani’s overture of entering into the retail market.