Pros of allowing FDI in Multi-Brand retail sector for India

• Some domestic retailers have had to fold up because they expanded too fast and couldn't finance their plans. Eg. Vishal, Subhiksha and Koutons. FDI will provide the much needed funding.

• Will bring down the difference between farm-gate prices and retail prices

• Will bring technical know-how to set up efficient supply chains which could act as models of development

• Will increase employment as companies will need to hire millions for their pan-India retail operations

• It will also make joint ventures easier, simpler and cleaner• Researchers estimate avoidable supply chain costs (wastage,

excess inventory and excess transportation costs) in Indian food and grocery sales to be about US$24 billion

• It will bring with it the technologies and expertise required to build robust food supply chains.

• Foreign players will invest in backend infrastructure and cold chains necessary to reduce wastage of farm produce.

• It can tackle food inflation which is a major problem today

Cons of allowing FDI in Multi-Brand retail sector in India

• Retail sector is the second-largest employer in the country and a flood of foreign competition may lead to many people losing their jobs

• Local traders and retailer associations, manufacturers, small retailers and NGOs are strongly opposing it

• Fear that foreign players will totally monopolise and grasp the market

• Many fear farmers would be forced to sell their produce at lower prices, citing case studies from experience in the US

• It would lead to unfair competition and ultimately result in large-scale exit of domestic retailers, especially the small family managed outlets, leading to large scale displacement of persons employed in the retail sector

• Indian organised retail sector is still in a nascent stage and therefore it is important that the domestic retail sector is allowed to grow and consolidate first, before opening this sector to foreign investors