Recently the Government had to back track on its decision to allow Foreign Direct Investment in Retail, due to opposition from the Opposition parties and also from its allies the DMK and the Trimul Congress. What is FDI in retail ? In real terms it means that foreign giants like Sears and Walmart will bring in millions of dollars in the retail trade.
The retail traders would be buying their products direct from the farmers and as such the farmers will get a better price and return for their products. It is certainly a good thing for sellers of theirproducts like vegetables and food stuffs. With millions of dollars coming into the economy, the lot of the farmer and the producer would improve.
The only man to suffer is the small shopkeeper or Bania who sells the products in local shops. This small retailer has no money of the type that FDI will bring in and assuch he cannot match the prices which the farmers will get with the injection of FDI. The local bania or shopkeeper has for centuries exploited the farmer and this exploitation will stop. in the long run even the small shopkeeper will benefit as he could team up with the big giant and become part of its chain.
The oppostion to FDI in retail is thus without foundation. Perhaps its is politically motivated and not on merits of the deal. If India is to move forward, a market economy is a must and FDI is part of that new deal. In India the need is to inject funds into the economy and this can only be done by Foreign chains and funds. One hopes that this opposition will die down and India can leave the socialist rhetoric of Nehruvian economics behind.