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Descriptive Test : Topic- Is FDI in retail good or bad?

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Hello Friends !!! welcome to Descriptive preparation window of affairs cloud. I am trying to collect different views on this topic.This topic is important for Descriptive Test of Sbi po,IBPS series and many more Exams

Is FDI in retail good or bad?

  • FDI is good to some extent for the development of the country. It brings about the new technologies and capital which is otherwise not available in the country. In the era of globalization, the world has become a one big family and sharing of technologies and capital with other countries are a win win situation for both the countries.
    Indian retail sector is not as organized as the western world. This sector depends much more on the small shopkeepers who share a kind of relation with their customers so that the customers do not go for the other vendors because the people have faith in their shopkeepers.
    But this thinking of the people of this country is changing as more and more people are migrating from their home cities to others for the sake of employment or other better opportunities.
    So they lack the relationship that was used to maintained with the shopkeepers in India. FDI in Indian retail sector will not bring any new technologies with it but will allow large multinational to end a chain that lies between the manufacturer and customers.
  • In FDI there are four participants:

Companies point of view:
India is developing country so they will get good share for their investment as India is ranked 3rd in PPP. Now customers point of view: customer will get more option to choose and at cheap rate due to competition without compromising the quality of the product.

Farmers point of view:
They will get good infrastructure (cold storage’s, ware houses) , good supply chain management, good income for their farm produce, single procurement source.

Government point of view:
Good foreign exchange reserve for India, it will increase employment rate, technology transfer will help to learn their technique and efficiency of making good product at less cost. So I think FDI is good for India with some government Interventions.

  • FDI Helps in transfer of new technologies, management skills, intellectual properties. FDI also can increases competition within the local market and this brings higher efficiency.
    Although Foreign Direct Investment in Retail will help in providing employment and developing our country but this will create a problem for small Indian retailers to exist in the market as this will increase the competition for them. For small Indian retailers it will become hard to compete with the global retail chains.
    Retailing in India accounts for 14 to 15 percentage of GDP. Allowing FDI will benefit the consumer by lowering the price of the commodity and eliminating the middlemen but definitely it will create unemployment for semi-skilled personnel.
    As global retail chains will prefer to hire trained and skilled personnel. If Govt, in spite of many drawbacks, still want FDI in retail, it should have to create rules and regulations to keep control and maintain the growth level in India. Govt need to consider all the facts regarding FDI positive as well as negative before taking any step.
    FDI may benefit in short term by providing employment and increasing the competition to bring out the best in all the respective areas but in the long term it will benefit the global chains only.
    They will use our India for its own development. Instead of allowing FDI we should develop our Indian retailers to compete with global retailers by providing different growth opportunities.


  • “FDI is not beneficial for India” because India is developing country and foreign investors invest in India for their brands not to develop our country but for their sake. I give you a daily base.
    EXAMPLE: Chinese toys are more cheaper than Indian toys and mostly people want to buy those goods which are cheaper. Because they do not have enough money. Due to this India can’t develop our economy.
    Because we people prefer foreign things due to MODERNIZATION. So it depends on we people that what we have to opt for our economy. Domino, pizza hut, doughnut these companies will make profit and our Indian salesman are in huge loss. And our Indian economy are not rising.