ESSAY FOR SBI PO - FDI IN RETAIL

FDI IN RETAIL

E- commerce is one the those sectors of the country that reflects robust growth and a sector where investors multiplied with each passing day. When rankings are generated of industry wise annual increments,it is figured prominently that e-commerce ventures are in the forefront of hiring top talent and with it’s growth it is forcing India’s logistics industry to modernise and expand. Even stodgy post offices are gearing up to take on a share of the action. There is every reason for the government to encourage e-commerce; yet its policy hinders its growth, particularly of small and niche segments that have maximum linkages with small-scale and traditional manufacturing in the country. This must change. The simplest thing for the government to do is to change its dogged opposition to foreign direct investment (FDI) in retail of all kinds.

As FDI is retail sector in single brand is hundred percent whereas in multi brand it is only 51 percent. The percentage of investment in multi brand in retail need to be revised as Multi-brand in e-commerce is one such sector that can help the small players to widen their area of operations as multi brand is a large e-commerce firm that splits up its operations of procurement, warehousing and inventory management and sale to consumers into separate organisations, and claim foreign investment flows only into the marketplace operations. Opening up of FDI sectors for small players will lessen the existing superfluous divides between cash rich players and ailing traders. As cash rich players and large traders faces problems in regard to tax compliance and quality control and these problems are more crippling for specialist e-traders dealing in handwoven silk and handcrafted jewellery. They need to maintain the inventory themselves to control quality, without assurance of which their very existence would be redundant. Such specialist e-commerce players can greatly improve market access for skilled but impoverished craftsmen in rural India, but only if they are free to perform the job of curating their merchandise.

Doing same thing over and over agin and expecting different results each time is defined as insanity. In similar way when facts change, sentient beings change their opinion. Leaders of the government once opposed FDI in e-commerce, based on certain deemed facts. But facts have been altered. Shouldn’t the policy?