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Knowledge Session 1
Retail in India
Organized retail is 6% but growing fast
Global range:
2% in Pakistan
35% Brazil
55% Malaysia 85% USA
Reliance
Reliance Fresh, Trends, Jewels etc
Multiple taxes
State VAT, Central CST, Octroi etc
FDI in retail
Current scenario
100% FDI in Cash and Carry 51% in Single brand stores Proposal
to allow 100% in Single brand and 51% in multi brand retail
Potential impact
Infusion of cash for cash Intensive business
Infusion of technology and practices Boost to supply chain and logistics Cold storages and processing units Will require change in APMC
Partnership with Indian players Local knowledge and global expertise Boost to Indian Suppliers 30% sourcing from Indian SME Sourcing from India for global operations
Potential impact
Impact on urban small retailers
Loss of business and potential closure FDI allowed in 51 cities
Farm to fork
Better prices for farmers, consumers Reduced losses in transport & Storage Contract farming Technology sharing with farmers
Is it a good thing?
For Farmers Should get better prices Impact may be limited to Medium/Large farms Better seeds, technology and farm practices Multiple options for farmers Loss of bio diversity For Small retailers Loss of business, but most will survive Impact high in proximity to Modern stores Will have to adapt and might need support
Is it a good thing?
For consumers
Better prices, larger variety, Better shopping exp Convenience for Working families Would increase consumption expenditure
Purchase of processed food, impulse items
For Manufacturers
30% rule would benefit SMEs Large manufacturers margins squeezed
Is it a good thing?
Employment
Loss of unorganized sector jobs at small retail Creation of organized sector jobs Net Growth in employment if Consumption Inc Additional jobs in supply chain/Food processing
Government
Higher tax revenues through organized retail May boost agri exports from India
Conditions Apply
APMC act needs to be amended