FDI and unemployment in India

The issues will always keep coming back unless a decision is taken and are put to rest. Foreign Direct Investment (FDI) will only do well and bring more convenience for the Indian consumers who are fast adopting the western style of living and working. “One stop shop” is what the Walmart’s will bring to India. Conservative school of thought may be against the whole idea and argue that FDI will kick middle men and the local “Mom and Pop” shop owners, out of business. However, it’s important to realize that what’s applicable to the rest of the world has proved wrong in India time and again. Example, Mc Donald’s which used to take pride in standardization of its outlets – ambience and menu, across the world was forced to indianise its menu to suit Indian palate. In India, unlike anywhere else, there are various economic layers in the society, and various retail formats to suit the requirements of this varied middle income group. Here the organized retail comprises only 2% of the total retail business (remember Shopper’s stop, pantaloon, ShopRite Hyper are just metro phenomenon). This largely disorganized (98%) sector contributes to 11% of Indian GDP, which can still continue to be the case if it is emphasised that Walmart will source its raw materials and fresh products from India. China has become the manufacturing hub for Walmart, thanks to cheap labour, which is true for India as well. Walmart can focus in India to not only increase its consumer base but also to build up its logistics and inventory chain. This will not only give employment to people who may be uprooted due to organisation of retail but also add to the export figures. Win-Win situation for all.