1. POLITICS BEHIND
FDI IN RETAIL IN INDIA

2. Prepared by
P.SARAVANAN B.Tech.,MBA
www.twitter.com/saravananrulez

3. Beginning of FDI in Retail in India
• In PV Narasimha Rao’s govt,the finance minister
Manmohan Singh allowed limited FDI in retail as
a result of which Dairy Farm, a multinational
corporation made an entry in India.
• In 5years, P Chidambaram, Commerce Minister of
the same government who initiated trade
reforms and changed Import & Export
Policy, changed laws to go back to square one
because by then he was finance minister of a
communist-supported government.

4. Entry of FDI
• In 1997, FDI in cash and carry (wholesale) with
100 percent ownership was allowed under the
Government approval route.
• In 2006, 51 percent investment in a single
brand retail outlet was also permitted in 2006.
• FDI in Multi-Brand retailing is prohibited in
India.

5. BJP’s ego in politics
• In 2002 FDI was rejected by the Vajpayee (BJP)
govt.
• Dr. Manmohan Singh had argued against FDI

6. FDI rejected..
• On December 21, 2002, The finance minister
gave an assurance that the government had
no proposal to invite FDI in retail trade.

7. Suspending of FDI in Retail
• 7th december,2011 the government has
decided to hold back its decision to allow 51
per cent FDI in multi-brand retail.
• FDI in multi-brand retail could have created
over 10 million jobs in three years, curbed
wastage of farm products and benefited
farmers through better prices for their
produce.

8. Opposing parties
• BJP
• UPA Ally Trinamool Congress
• TamilNadu AIADMK
• DMK
• Industrialists in Indian retail chains like Future
Group, Reliance and Tata

9. Politics behind Opposing
• Political parties are opposing these reforms,
purely to pick up votes from select
constituents by making inflammatory
statements
• Some opposition parties are opposing FDI
reforms, merely to embarrass and corner the
ruling Congress leadership

10. Missed oppurtunity
• The hygiene levels of small shops are very poor.They
abound in rats, insects and ants. Some shopkeepers do
not even undertake basic pest control, just to scrounge
on some money.
• Many small shops sell date expired stocks by deleting
or smudging the information printed by manufacturers
on the packs. Many small grocery stores do not give
the free gifts (consumer offers), which are given by the
manufacturers of consumer product companies.
Professionally managed hypermarkets do not indulge
in such malpractices

11. Conclusion
• A simple commercial decision has been
exacerbated and elongated into an
unnecessary political crisis by thoughtless
opposition. Hypermarkets co-exist with small
shops in most countries in the world - in
large, small, rich and poor nations, in all
corners of the world.
• It is time India removed its blinkers.

12. Thank you