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Why do we need Walmart in India, when there are already local players like Tata Star Bazaar, who can give us the same benefits of employment etc.?

  • Agreed that we need FDI in India, but won't financing Indian firms now, reap benefits for India in the future, instead of letting these foreign companies exploit ? Can't the regional companies like future group, develop equivalent infrastructure & service efficiency like the walmart ? In this way we can make our Indian companies prosper.

  • Answer:

    For the same reasons we needed Ford and Honda and all the global car companies to enter India when we were driving in Ambassador's and Fiats and Dolpins and Maruti's. It will catalyze the infrastructure development process and bring in the the most sophisticated supply chain processes/resources. If we can advance the maturity of the  retail landscape by 15 years that's 15 years sooner that food will stop rotting and the consumer gets more choice and better cheaper more efficient access to goods and food.  All of this should be done in a measured and calibrated manner to avoid Walmart dominating and taking over the supply and retail landscape. Good policy can accomplish this. There is a trust deficit in government and they are making backroom deals and are riddled with instances of corruption scandals that sell the country out for personal gain or political capital/maneuvering. The Indian government should have enormous leverage in getting what they want because of the size and scale of the market. However, are they smarter, shrewder, more knowledgeable about negotiating the right terms against the extremely astute multinationals who have had  enormous experience negotiating with other countries? This remains to be seen. The public needs to be on this to make sure the policy is always people first/Country first.

Amith Prabhu at Quora Visit the source

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When it was propositioned that there be a significant FDI in the food industry, the reason given out was noble. India, apparently produces enough food, but lacked the infrastructure to store it without contamination in a way that would reach the people. i.e., we were bad on the Supply Chain, Warehousing, and Packaging fronts. Add to this the obscene amounts of grains wasted by the Food Corporation of India every year, while the UN was shamelessly publishing the Hunger Rate of the country. It was propositioned that, with the insanely huge amount of Dollars that the Foreign Retailers would bring, they would be converting the wastage into reachable food. Almost all such policies about FDIs or any investment related do not originate from the depths of the noble hearts of the Indian Law Makers. For even such an idea to germinate, it needs an all pervading force called "Lobbying". In this case, Walmart was the major contender in the Lobbying game. Why not finance Indian Firms? The objective of FDI is to let them bring their money. Financing Indian Firms would lead to direct government involvement with the firms. We had just stepped out of the "Licence Raj" that dictated the government's presence on all Industries about two decades back. Again, there would come the question of finding a suitable company to back. We cannot finance selective companies. Direct Government financing is usually either in the form of Subsidies, where the government reimburses a significant fraction of your asset cost. Or, it is in the form of SEZs where a company can enjoy Tax Relief for all its procurements. Rarely, it may come in the form of Bail Outs. When a public company is about to crumble the State may step in and keep money flowing. Most government organisations like the MTC, SETC ( the Transport Corporations of Tamil Nadu), and Union intensive organisations like Bharathi Mills, and Anglo French Textiles (both in Pondicherry) come under this category. Above all, there's always Red Tape, and lack of foresight.

Kumaresh Passoupathi

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