The recent hot topic in media and as usual, heavily debated by general public in social network medias is about Foreign Direct Investment (FDI). Everybody has got an opinion on FDI and wants the Indian Government to ban FDI in retail sector. So, I thought let me also write my opinion about FDI. Now, whoever is reading this blog has no choice but to read my opinion!!!!
What’s wrong in allowing FDI in retail sector? Isn’t competition good for business and also for end user? I have seen few people saying the local traditional “nadar shops” and “chettiar shops” have to close down if Government allows FDI in retail sector.
What are these people trying to tell me? That nadar shops and chettiar shops are more expensive than Wal-Mart, Carrefour, etc.? If yes, then I think it is only fair to bring these international giants in order for the nadar shops and chettiar shops to be in competitive range.
As an end-user consumer, where will we buy the product (assuming we are comparing apple to an apple)? We will buy from the cheapest shop. If this is the case, how can Wal-Mart and Carrefour be a threat or competition to local retail vendors? How can a multi-national company, considering all the huge investments and expenses, be competitive than a local vendor?
In my opinion, the public is opposing FDI just because the media and some politicians are saying it is wrong. Haven’t we, India as a country, allowed foreign companies in other sectors? Where were all these individuals opposing FDI were at that time?
The day we decide to buy a car, we compare Toyota, Honda, Hyundai and Ford for price and fuel efficiency comparison. We sometimes even forget that Maruti and Tata do make cars, which are Indian companies.
We want to celebrate a birthday party or get together at Pizza Hut, Dominoes Pizza, Mary Brown, KFC, etc. At that time in our short list for venue, the Muniyandi Vilas, Thalapakattu Briyani and other local vendors name won’t feature.
Ask the current generation kids what soft drink they like. Mostly, the answer will be Pepsi or Coca Cola. They might have even forgotten that there was a local company producing Thumbs Up (now they may remember due to fantastic advertisement campaign with Akshay Kumar). We want to drink Coke and Pepsi but don’t want foreign companies entering into retail business.
How many individuals own BPL TV or other Indian made televisions? Most of us have Sony, Samsung, Panasonic, etc… Why don’t we stop buying foreign televisions?
I am not even sure if any Indian company makes cell phones in India. The biggest market shareholder for cell phones are Nokia, Sony Ericsson, Blackberry, Apple, etc. Why do we buy foreign brands if we are protesting against FDI?
So, we want to enjoy the fruits of all international comforts and cuisine. When Government opens one more sector for foreign investment, we start the protest and say the Government is trying to kill retail vendors in the country.
Look at the other side also. We proudly say Mr. Vijay Mallya has bought White & Mackay Distillery and he is now the world’s third largest distillery owner. An Indian buying foreign companies and investing in foreign countries is national pride.
Tata Motors went ahead and bought Jaguar and Land Rover companies in a single deal. We were very proud to say that now Jaguar and Land Rover are party Indian made cars (due to the ownership).
We want our Indian investors and businesses to invest/buy foreign businesses but we do not want foreign investments to enter into India. Is this reasonable or being patriotic? I think this is being greedy. We want to take over the entire world with our money power but don’t want foreign companies making entry into India.
For some reason, Indian currency became weaker against dollar and many other foreign currencies. What did happen? There’s an article, which claims more than $700 million worth of foreign currency came into India during this period. These are money transferred by NRI’s living outside India. There was also an article, which stated that Saudi Arabia thought of banning money transfer into India for a while due to the amount of money going out of Saudi Arabia.
What does above indicate? We have so many Indians working abroad (that includes me too!), who earn money living in a foreign country. If we are all so patriotic that we do not want foreign countries to invest in India, why do we come abroad in search of a job? By doing that, aren’t we taking away employment opportunity from local nationals, wherever we go to work? In what way this is right if a foreign company investing in India is wrong?
I don’t want to deviate from the topic of this blog and I am going to write my next blog about the public mentality and media’s role in diverting issues. Many of us blindly believe what media says is 100% truth.
So, as I drive my Nissan SUV in UAE roads and spending Dirhams as I watch the Indian currency exchange rate keenly, I also protest FDI being allowed in India…. JAI HIND !!!
My boss used to say this famous Quote – “Learn from your Mistakes “ . We have already made the mistake by allowing few … from your point of view; we have to get accustomed to whatever mistake we made and not correct it!!!!
ReplyDeleteFor your kind information, traditional “nadar shops” and “chettiar shops” never hesitated to work on competition and if you check again, these shops will have the lowest prices compared to any supermarkets… But managing the competition won’t just be in terms of selling but in investing as well, where these will face the toughest situation. Imagine Walmart & Carrefour’s investment & ability to get the funding through various resources and do you expect the same kind of investment from these small shop owners? This is called invasion and not competition.
All the products like cars, TV’s you mentioned may be purchased for once or few times in your lifetime, but FDI is not going to hit with these products but daily use commodities. Any public will have direct or indirect effect as these products will be consumed on daily basis. Though there are many varieties of cars, Still Maruthi & Tata owns the largest Indian market share FYI. There are still millions of Indians of Passionate Indians using just Indian products.
Largest Market share holder of Mobiles – Nokia has manufacturing unit in India and all its latest products are made here.
Whatever examples you gave about Pizzahut, KFC are just used by a small group of peoples.
Finally, please stop cursing Indians. Step in to India and check the business conditions here and start commenting on your blog about FDI.
** COMMENT FROM SENTHIL KUMAR - POSTED IN FB... I posted here so that I can reply and everyone can read **
ReplyDeleteMy boss Anand Nataraj used to say this famous Quote – “Learn from your Mistakes “ . We have already made the mistake by allowing few … from your point of view; we have to get accustomed to whatever mistake we made and not correct it!!!!
For your kind information, traditional “nadar shops” and “chettiar shops” never hesitated to work on competition and if you check again, these shops will have the lowest prices compared to any supermarkets… But managing the competition won’t just be in terms of selling but in investing as well, where these will face the toughest situation. Imagine Walmart & Carrefour’s investment & ability to get the funding through various resources and do you expect the same kind of investment from these small shop owners? This is called invasion and not competition.
All the products like cars, TV’s you mentioned may be purchased for once or few times in your lifetime, but FDI is not going to hit with these products but daily use commodities. Any public will have direct or indirect effect as these products will be consumed on daily basis. Though there are many varieties of cars, Still Maruthi & Tata owns the largest Indian market share FYI. There are still millions of Indians of Passionate Indians using just Indian products.
Largest Market share holder of Mobiles – Nokia has manufacturing unit in India and all its latest products are made here.
Whatever examples you gave about Pizzahut, KFC are just used by a small group of peoples.
Finally, please stop cursing Indians. Step in to India and check the business conditions here and start commenting on your blog about FDI.
Senthil Kumar, First and foremost thanks for reading my blog and sharing your comment.
ReplyDeleteWe do not know each other personally, so you do not know how patriotic I am or what businesses I have in India. Also, please note that I am not cursing Indians (or anybody for that matter) in my blog. I am only pointing out on public being diverted from the issues thanks to media. Today everybody is talking about FDI... If media starts to focus on some other issue next week, public will forget FDI and will discuss on that topic.
Now regarding your comment on Indian products and using as much as Indian product, how many Indians wear Khadi? Why do we buy clothes made of imported synthetic yarn?
You stated that cars and TV's are bought once in a while but FDI should not be allowed in consumer products. If all Indian followed this, there won't be so many KFC, Pizza Hut branches in India. KFC, Pizza Hut & others are FMCG items.
Which is the highest selling chocolate in India? Cadbury? When did Cadbury became Indian company?
Many of us give our children Corn Flakes for breakfast because it is healthy and rich in protein and fiber. When did Corn Flakes become Indian breakfast item? Which country does Kellogg's (world's highest cereals manufacturer) belong to?
Even Maruti started off in India in collaboration with Suzuki. But we all forget that Maruti completely wiped out an Indian company which manufactured cars under the name "Dolphin"....
To make Ambassador a little more powerful, Hindustan Motors had to use Isuzu engines in their Ambassador cars.
HMT stopped manufacturing watches... Why??? Because many of us (Indians) did not buy HMT watches. We preferred Seiko, Citizen, etc.
How did Noida and other IT sectors in India became such a big commercial area? By operating BPO's. We want foreign companies in BPO form so that we (our people) get better job opportunities. But why not Walmart?
My whole point in this blog is that in today's world scenario the whole world has become a global village. Not just India but many countries have foreign investments and foreign businesses in their countries. This is part of the change.
As pointed out in few of the examples above, we already have FDI in many FMCG sector. But why now protest against Walmart saying FDI in retail should not be allowed. That's my whole point.
It is statistically proven that in any country Walmart started their chain store operation, the country GDP grew by 3% or more. It's not just Walmart starting operation in India. It is also they are going to provide a lot of employment opportunities to Indians. Why not look at that positive side?
If you feel any of my above comment is wrong, please do let me know.
SK,
ReplyDeleteI would agree that FDI can be allowed, as you said world is becoming a global village so it is fine to allow. But there are genuine concerns what if those giants once they gain a foot hold start dictating our market.
Though there is a protest.. it will die soon and FDI in retail will be there. I only wish the government has good policies and people to check the flows or the trade to ensure India doesn;t become wholly owned subsidiary of another country !!!
I state this as I don't have trust in our politicians key in decision making are really patriotic and live for country.
Sriram, if Government follows what is already set as a rule, there's nothing to worry.
ReplyDeleteHow does all these international giants become big? Because we buy their products. When KFC first started in Bombay, I was told the waiting time to get your burger was almost 40 minutes. When we create such a big demand, the companies will obviously spread their foot print.
If we really don't want international companies to grow in India, it is we, the public, who should create that. If there's no sales, why does KFC, Pizza Hut and others keep opening more branches? Service?
Again, we all as general public have one thing to say "Government is corrupt they should control". But we forget that we, the general public, choose that Government !!!!
SK,
ReplyDeleteI agree, we chose the government. But choosing a lesser thief amongst present out there.
There should be a way to clean the system, but which would be effective only if both public and government - again that person should remember he/she is also public cooperate.
Sk,
ReplyDeleteThanks for your response for my comments and I do agree with your passion...
You see the pro's and I see the con's. Whatever examples you gave are not deniable but I am just thinking about the small business and its survival....
This was one of your comments in one of your previous post.. What's the point in protesting against a problem without solution? There's a saying that more than 95% of people know the problem and can talk about it... But only 5% can offer a solution for the problem rather than talking about the problem itself... I am trying to find a solution and May be a system to clean this. I may not be among 5% to give perfect solution but never want to be among 95% people who just speaks about it.
Dear Good Sir,
ReplyDeleteFor an informed debate on FDI in retail, please read the discussion paper on DIPP website issued by the government of India
http://dipp.nic.in/DiscussionPapers/DP_FDI_Multi-BrandRetailTrading_06July2010.pdf
Regards
Imran Hussain
Dear Imran... Thanks very much for the link. I have downloaded and will read soon.
ReplyDeleteSenthil Kumar... I agree and I am glad you have read all my blogs and appreciate you remembering what I've written.
ReplyDeleteImran, again thanks very much for sharing that link. That's the recommendations from committee to Indian Government on FDI in multi-brand retail sector. Issued in 2009.
ReplyDeleteThe statistics are quite impressive and now it makes my case stronger to allow FDI in multi-brand retail with caution to curtail monopoly. :)