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THE HIMALAYAN DISASTER: TRANSNATIONAL DISASTER MANAGEMENT MECHANISM A MUST

We talked with Palash Biswas, an editor for Indian Express in Kolkata today also. He urged that there must a transnational disaster management mechanism to avert such scale disaster in the Himalayas. http://youtu.be/7IzWUpRECJM

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

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Saturday, November 26, 2011

FDI in Retail for 99% Indians – Vendors, Farmers, Consumers Share Holders

FDI in Retail for 99% Indians – Vendors, Farmers, Consumers Share Holders   

 

To,

TMC, DMK, JDU and BJD MPs,

 

Sir,

When foreign investment in India is barely $149b, Indian Corporates have invested over $300b in foreign ventures – in additions to businesses and companies owned by NRIs. There is huge deficit on FDI count. But most critically companies like WalMart would introduce Quality, Service and Value standards in India – missing so far. A CFL lamp that should last 6000 hrs fail in 1000 hrs, an Invertor Battery that should last 10 years fail in two. A phone that should cost Rs.1500/- sell for Rs.30,000/- etc.

 

Above all WalMart and other retailers buy directly from manufacturers and artisans and farmers all benefit directly and shall boost productivity and exports.

 

This week prices of vegetables in Punjab as per PTC News were Rs.2.5/kg for Potato, Rs.3-5 per kg for Cauliflower, Tomato & Brinjal and Rs.8/- per kg for Oinion but retail price in South Delhi when prices in Delhi were Rs.15/kg, Rs.20-40/kg for  Cauliflower, Tomato & Brinjal.

 

In May2011 when Water Melon & Musk Melon (Tarbuza & Kharbuza) were retailed for Rs.20/kg & Rs.30-40/kg in Delhi prices of Tarbuza & Kharbuza were Rs.3/kg and Rs.5/kg in Punjab.

 

So there is Mafia Control over supply of essential foods, farmers are underpaid and consumers are over charged.

 

Similarly as reported by me yesterday 4G Smart Phone that doubles up as TV, MP3 Video Player, Computer, Digital Diary, Wallet, Camera with 4G, 3G and 2G plus Bluetooth, WiFi, Wimax capabilities etc was retailed for Rs.1500/- only – this phone is retailed for Rs.40,0000/- in India but without functional 3G and no 4G.

 

Earlier I noticed and reported how a Media Pedestal Fan purchased for Rs.650/- from China was retailed for Rs.1600/-.

 

Thus 99% Indians shall directly benefit from FDI in Retail.

 

Even street vendors on payrolls of Trader Mafia too shall benefit from FDI as they shall get quality products at much lower price and would pay less for foods.

 

Objections

 

TMC, DMK, JDU and BJD MPs, should object India Traders or Banias partnering with Foreign Retailers.

 

Street Vendors, Farmer Cooperatives and Retail Investors should contribute 49% equity.

 

This should address the Grievances of the Street Vendors who shall benefit from cheaper but quality products, earnings from shareholdings.

 

FDI in retail shall benefit India immensely.

 

Ravinder Singh

Inventor & Consultant

November26, 2011

 

FDI in retail: MNC retailers to select partners with suitable capabilities

PARESH PAREKH 

India's retail market promises to be among the top retail destinations in the world, thanks to rising consumption. 

International brands and retailers will gain access to a substantial market, following Cabinet's decision to allow up to 51% foreign direct investment (FDI) in multi-brand retail sector and 100% FDI in single-brand retail. 

FDI in single-brand retail currently is 0.03% of cumulative FDI of around $149 billion from April 2000 to September 2011. The relaxation is likely to result in an increase in FDI in retail sector, especially ingreenfield and brownfield investments. 

Indian retail market, which was around $220 billion in 2005, is now expected to hit $700 billion by 2015, with aCAGR of about 12%. 

Within retail, modern, or organised, retail is growing at a fast clip, with CAGR of about 21%. Though the industry was expected to grow at a much faster rate 5-7 years ago, the actual growth rate was much lower. Lack of retail expertise and experience has been the main reason for this subdued growth. 

FDI in retail will pave the way for inflow of technical expertise and knowledge and this, in turn, can boost the overall growth of the industry. The announcement is expected to generate 10 million jobs over three years, without impacting smaller and domestic retailers. 

The sophisticated front-end that international players are likely to bring will boost investment in infrastructure by retail players, third-party supply-chain companies and the government. This will improve efficiencies in the supply chain, cut wastage, increase efficiency and bring down consumer prices. 

Fact is, farming community in India has shown one of the lowest efficiencies in terms of production. Our productivity in food and agriculture is among the lowest in the world and there is a significant opportunity to raise output, with investment in better farming practices. 

FDI in retail will provide the farming community a new support group with a common interest that is expected to give a big push to productivity. 

Foreign multi-brand retailers, who did not want to enter India through cash-and-carry route, may now explore Indian presence, as they would be able to directly own stake in multi-brand retailing. Foreign retailers such as Sainsbury's, Lawson and others may now explore Indian retail market. 

Multi-brand foreign retailers that have already invested in India under cash-and-carry arrangements, such as Walmart, Metro, Carrefour, Tesco, and Woolworths, now have an option to invest in Indian companies undertaking direct retailing. 

In existing single-brand retail joint ventures, the foreign multinational joint-venture partner would have the flexibility to raise its stake in the venture beyond 51%. For existing Indian retail players, such as Reliance, Trent, Shoppers Stop and the Future Group, this could provide further options to raise long-term capital for expansion and to attract partnerships with some global players. 

This will help bring capital as well as global best practices and retail expertise to the Indian businesses. 

Single-brand foreign retail players, who have so far restrained themselves from entering the country for reasons such as wanting the entire stake or ownership in an Indian single-brand retail entity, may now want to explore the Indian market. 

One may also potentially see present licensing, distributor or franchise arrangements being converted to either joint ventures with respective foreign retailer or brands, or foreign retailers completely buying out the Indian licensee, franchisee or distributor. 

In multi-brand retailing, as the foreign retailer can own a maximum stake of 51%, the retailer would have to scout for an Indian partner to enter Indian multi-brand retail sector. 

Further, one will have to wait for clarification on whether the entire amount of minimum capitalisation of $100 million is to be invested upfront or over a period of time. Also, would such a condition be too onerous for certain categories of multi-brand retailing such as sport goods, watches, stationery, apparel and electronics. 

Also, to comply with the norm of minimum 50% investment in back-end infrastructure, retailers would need to have a precise interpretation of the term back-end infrastructure. Another key condition is that foreign retailers should source certain minimum percentage from micro, small and medium enterprises. This could provide an impetus to the growth of the small-scale sector. 

With this relaxation of FDI in multibrand retailing, it remains to be seen whether the government will also relax the restriction on cash-and-carry companies that are barred from supplying more than 25% of their turnover to group companies. 

While FDI in retail sector has been relaxed with conditions, potential foreign retailers would assess customer dynamics, competition, supply chain, infrastructure and import regulations. 

They would also typically want to select apartner with complementing capabilities and cultural fitment, adapt products for the diverse Indian micro-markets, use appropriate sourcing models to manage costs and appeal to the Indian customer, and understand the tax and regulatory landscape in India. 

(The author is tax partner at Ernst & Young. Views are personal)

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