Issue
@CP: The facts you are keeping are perhaps wrong. Foreign brands do not need to purchase 35% from Indian SSI, it is just 20%.
Anyways Indian SSIs have 100% sales. Now when FDI will come, 20% of their produce will go to foreigners and 80% to other Indian companies.
Some time later, the foreign brands might also set-up their own SSIs under an Indian CEOs and say "We purchase 100% from Indian owned (%age wise) SSIs".
My point is why can't we better frame laws which will regularize the unorganized the broker community. Don't you think that in giving profits to only farmers we are taking away the lively hood of many people?
I thought it is 35%. That is what i was said by a sir two days ago. And the 20% won't go to the foreigners. it will be consumed by us only.
Well we had all these years to do that Law framework. My point is why not learn from someone else?
I'm addressing your other point below.
The_Big_K
@Civilprincess: India does *not* need cold storages. Any vegetable, once out of the farm should be consumed within 48 hours. Cold storages kill the nutritional value of food. I think there's enough evidence to prove it.
35% of stock must be purchased in India. What about the rest?
These shops will be setup at the places where the 'purchasing power' is greater. Else it does not prove to be a profitable model to the company. All small shops won't be affected, but a large majority of shops *will* be affected. FDI in retail is going to increase unemployment.
There's a HUGE difference. Big Bazaar is Indian. Wal Mart isn't.
Question remains: Who takes the profits?
Yeah as you say the fruits and vegetables must be consumed fresh. but in the unorganized way in which the retail chain is functioning these days aroud 40% of those foods perish. then there will be price cost when we cannot supply the commodity like that for the use. and using the cold storage units wouuld reduce the value. but doesn't make it inedible. a little less fresh is far better than no food right?
And not to forget cold stores are also used for the refrigerated goods, sea food, meat, etc.
but a large majority of shops in the locality will only be affected. As kidakaka had said earlier they will have to hire local talents only to work in the company. so then it will not be a total loss as you guys say. What i mean to say is that the positives here outweigh the negatives.
I'll try answering your question by just stating this fact:
Indian farmers realize only 1/3rd of the total price paid by the final consumer, as against 2/3rd by farmers in nations with a higher share of organized retail.
So what if Walmart is not Indian. It will still have to pay the same taxes to the Govt and if it can boost the Indian economy why not give it a chance. The govt has not given it the right to stay as long as it wants.