FDI in Retial - Entry of Walmart - Impact on Kirana Stores...

Ending months of speculation, Walmart the international retailing giant has announced joint venture with Bharati group. Alliance proviance a back door entry to Walmart...

Though Govt maintains that there is no change in its policy of not allowing foreign direct investment(FDI) in retailing, foreign retailers are taking advantage of loopholes in policy, in particular the decision to allow FDI in single brand and wholesale cash and carry trade business where 100% FDI is permitted...

More such ventures can be expected in the days ahead in the same way as Walmart has exploited obvious loophole in policy regime.

Walmart is likely to follow the footsteps of Metro AG, German retailer who already have presence in Bangalore and is to begin operations in West Bengal shortly, who supply goods in bulk to wholesalers, hotels and large establishments...

Imapct on small Retailers (Kirana stores)

Unorganized retailers account for 96% of retail trade, contribute 10-11% of India's GDP, employs 4 cr Indians in 12 million retail outlets..In India current annual retail sales per employee is about Rs 78000. In contrast each of Walmarts 3.3 lakh employees a/c for average sales of about Rs 74.18 lakh. The fact that Walmart turnover per employee is about 95 times that of an average Indian worker in retail gives an indiacation of extent of employment losses resulting from Wlamart enrty into India.

There is lot at stake for millions of people depending on retailing for their livelihoods. Sonia Gandhi has rightly asked the govt to go slow on allowing 100% FDI in retialing. If 100% FDI is allowed under pressure from global retailing giants who see India as an attractive market, it would prove to be a disaster for 4 cr Indians who depend on these Kirana stores....