Fdi Drawbacks

2359 WordsMay 23, 201210 Pages
Arguments against FDI in Retail in India 1. Predatory Pricing With its incredibly deep pockets Wal-Mart will be able to sustain losses for many years till its immediate competition is wiped out. This is a normal predatory strategy used by large players to drive out small and dispersed competition. This entails job losses by the millions. 2. Labour Displacement Another factor is that it can only expand by destroying the traditional retail sector. Till such time we are in a position to create jobs on a large scale in manufacturing, it would make eminent sense that any policy that results in the elimination of jobs in the unorganised retail sector should be kept on hold. If we assume 40 mn adults in the retail sector, it would…show more content…
Wal-Mart has a clearly defined anti-union policy aimed at preventing its work force from gaining any collective bargaining power which could result in increased wages, covered health benefits and job security. 10. As per International Farm Comparison Network (IFCN) data, milk producers in the US got only 38 per cent share of the consumer's dollar spent on milk, while the rest was earned by the processor and retailer. In the United Kingdom, the milk producers got only 36 percent. However, in India, the milk producer gets more than 70 per cent of the consumer's rupee on an average. Moreover, the milk producer affiliated to co-operatives get more than 80 per cent share of the consumer's rupee. In the US, the farmer's share in the consumer's price has declined from 52 per cent in 1996 to 38 per cent in 2009, while in the UK it has declined from 56 per cent in 1996 to 38 per cent in 2009. This decline clearly demonstrates that the milk producers suffer when the share of organised retail increases. 11. If we take the total retail sales in India to be Rs. 312180 crore approximately (which is around 11% of India’s GDP at factor cost at current prices in 2004-05), turnover per employee for the Indian retail sector comes to around Rs. 78045 (taking total employment of 4 crore). In contrast, the turnover per employee for Wal-Mart International comes to around Rs. 7418332 (Annual Report 2005 of Wal-Mart puts the total sales figure for Wal-Mart International at $

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