It has reference to the entry of FDI into India in retail trade. It is the presentation to be made/made in the UGC-sposored one Day National Seminar organised by Cauvery Degree College, Gonikoppal on October 1, 2014
1. Foreign Direct Investment in Retail Business
-B.V.Raghunandan
National Seminar,
Cauvery Degree College,
Gonikoppal
October 1, 2014
2. Classes of Foreign Investment
• Foreign Institutional Investment (FII)
• Foreign Direct Investment (FDI)
3. Government Move
• 51% FDI in Multiple Brand
Retailing
• 100% FDI in Single Brand
Retailing
• 30% Outsourcing Locally
from MSME units
• Brands need not be
Owned by the Parent, but
by any of the Subsidiaries
• In cities with a population
of not less than 10 lakh
4. The Widespread Opposition
• Political Parties are Dominated
by Mandis
• Fear of the Middlemen being
Removed
• Economic Issues are Adopted
when Political Ideologies
Whither Away
• Kiranawala is only an eye wash
argument
5. Consistency in Political Stand
• Party in Power Favours it
for Achievement
• Parties in Opposition Use
it to Create an Emotional
Hype
• Political Mileage is
Obtained
• Creation of a Mass
Hysteria
• Less Healthy Discussion
• Doomsday Attitude for
Every Change
6. Impact on Local Kiranawalla
• Near the Location
of the Customers
• Flexibility on the
Basis of
Requirements of
Customers
• No need to Scale up
the Model
• Low Employee and
Establishment Costs
• Customer Services
• Universal Presence
7. Need for FDI • Encouraging Contract
Farming
• Better Processing of
Agricultural Produce
• Networking with Local
Retailers
• Commercial Warehousing in
Rural Areas
• Better Dissemination of
Market Information
• Healthier Agricultural
Practices
• Better Seeds and Organic
Farming
• Better Agricultural Research
• Avoiding Wastages
8. Some of the MNCs in Linkage with Agri-value Chain
ADM (Archer Daniel Midland) : Soybean value chain
SAB MILLER : Barley value chain
PEPSICO : Potato value chain
MONSANTO : Sustainable value chain in Maize
BHARTI WALMART : Supply chain across diverse crops
Bharti-Del Monte Foods
(FIELDFRESH FOODS LTD) : Fruits & Vegetable value chain
9. • 3,500 small & marginal
farmers ( < 1Ha)
• 4000 Acres under contract
farming of baby corn
• Increase in farm output by
20%
• Technology transfer in
conservation of water,
chemical fertilisers and
pesticides
• Efficient weather insurance
• Modern post harvest facility
• Rural employment
10. PEPSICO INDIA
Contract farming in special
variety of Potato for their
chips brand Lays
Engaged with farmers in Bihar,
Gujarat, Karnataka,
Maharashtra
PPP in R&D and Agriculture
extension
Technical assistance on latest
cultivation practices
IMPACT
11,000 farmers
Increase in yields / net farm
income by 40%
Price support against volatility
11. ADM- Soybean revolution in Maharashtra
•
ADM has an oilseed process plant in
Latur, a backward district in
Maharashtra with no soybean crop.
ADM, initiated extension services in
this area.
Agri advisory centres were set up
for a cluster of each 20 villages and
farmers were introduced to soybean
cultivation
Women farmers were trained as
they work in fields.
High yielding variety seeds were
produced through farmers with
linkage to Universities
End to end technical guidance was
given to farmers
12. ADM- Soybean revolution in Maharashtra
IMPACT
2002 : 19,500 HA
2003 : 49,500 HA
2004 : 1,38,500 HA
2005 : 1,75,000 HA
2006 : 1,80,000 HA
2007: 1,86,000 HA
2008 : 2,05,000 HA
2009 : 2,26,000 HA
2010 : 2,43,000 HA
2011 : 2,74,000 HA
2012 : 3,03,000 HA
13. Interest of FDI
• Large Markets
• Stable Income Levels in
India
• Sourcing of Agricultural
Produce
• Festivals and Special
Occasions (Multi-ethnic
and Multi-religious)
• Cash Based Transactions
• Diversified Consumption
14. Problems for the FDI
• Limited Working Hours
• Working Hours Unsuitable for Indian Customers
• Expensive Real Estate
• High Salary to the Employees
• High Establishment Expenses
• Unsuitable for Many Lines of Products
• Indian Corporate Retailers paint a sad Story
• Younger Demography
15. Focus
• Development of Infrastructure in Rural Areas
• Better Price for the Farmers
• Effective Utilisation of Grains in the Godowns of Central and State
Warehousing Corporation
• Better Processing Facilities
• Increasing the Storage Facilities
• Better Farming Practices
• Better Farmer Education using Modern Technology