Modern Retail has advantages that are well documented all over the
world. Modern Retail has indeed changed the dynamics of how supply chains work and how customer can be better serviced using end-to-end integration techniques. The Economic times has published an Infographic abo
ut how Modern retail can be beneficial to farmers - Follow the same here - So what are the top three differences that FDI in Retail can bring in a positive sense and the negative sense? We delve into this issue deeper
Three Advantages of FDI in Retail -
1. More investments in the end to end supply chain - For the Foreign Multi Brand retailers, entering India later would be a significant disadvantage and they would try and introduce a lot of innovations hitherto not introduced. For one, they would invest heavily into end-to-end supply chains including world class cold storage facilities.
2. Low spillage and wastage - In India, the supply chain is considered highly inneffient due to the huge wastage during the transportation. The global world class retailers would introduce quality standards that are second to none and would lead to more farm produce reaching the end consumer in a consumable condition. This would improve productivity of the entire system.
3. More options for the consumer - The consumer would get compelling options for doing their shopping which would lead to a fulfilling consumer experience
Three disadvantages of FDI in Retail -
1. Existence of Indian biggies- Already multiple Indian corporates are well entrenched into the Indian Market with their organised multi brand retail offerings. Under this situation is an FDI influx truly required? That is one of the biggest questions that is being asked.
2. Little incremental value - The critics of the move say that India as a country requires different fundamentals to survive and deliver value to the consumer. The last mile delivery of a lot of goods happen to the consumer's home - the retailer goes to the consumer in India and not the other way round, thus far in a lot of cases. Hence, the critics claim that there is little incremental value by implementing FDI in retail rules.
3. Will Prices reduce for consumers - Not at all - Will there be a net gain for consumers in terms of Price savings? Not at all. Not even the biggest supporters of FDI in retail claim that the consumer will spend less from his/her pocket due to this FDI in retail influx.
Clearly, there is a lot more to this debate, and both sides claim to have a lot of positives. Where will the public opinion side with? What will the aam aadmi say? Let us know.
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