Fdi in retail business b.v.raghunandan
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Transcript of Fdi in retail business b.v.raghunandan
Foreign Direct Investment in Retail Business-B.V.Raghunandan
National Seminar,Cauvery Degree College,
GonikoppalOctober 1, 2014
Classes of Foreign Investment
• Foreign Institutional Investment (FII)• Foreign Direct Investment (FDI)
Government Move• 51% FDI in Multiple Brand
Retailing• 100% FDI in Single Brand
Retailing• 30% Outsourcing Locally
from MSME units• Brands need not be
Owned by the Parent, but by any of the Subsidiaries
• In cities with a population of not less than 10 lakh
The Widespread Opposition
• Political Parties are Dominated by Mandis
• Fear of the Middlemen being Removed
• Economic Issues are Adopted when Political Ideologies Whither Away
• Kiranawala is only an eye wash argument
Consistency in Political Stand• Party in Power Favours it
for Achievement• Parties in Opposition Use it
to Create an Emotional Hype
• Political Mileage is Obtained
• Creation of a Mass Hysteria
• Less Healthy Discussion• Doomsday Attitude for
Every Change
Impact on Local Kiranawalla• Near the Location
of the Customers• Flexibility on the
Basis of Requirements of Customers
• No need to Scale up the Model
• Low Employee and Establishment Costs
• Customer Services• Universal Presence
Need for FDI • Encouraging Contract Farming• Better Processing of
Agricultural Produce• Networking with Local Retailers• Commercial Warehousing in
Rural Areas• Better Dissemination of Market
Information• Healthier Agricultural Practices• Better Seeds and Organic
Farming• Better Agricultural Research• Avoiding Wastages
Some of the MNCs in Linkage with Agri-value Chain
ADM (Archer Daniel Midland) : Soybean value chain SAB MILLER : Barley value chain PEPSICO : Potato value chain MONSANTO : Sustainable value chain in Maize BHARTI WALMART : Supply chain across diverse crops Bharti-Del Monte Foods (FIELDFRESH FOODS LTD) : Fruits & Vegetable value chain
• 3,500 small & marginal farmers ( < 1Ha)
• 4000 Acres under contract farming of baby corn
• Increase in farm output by 20%
• Technology transfer in conservation of water, chemical fertilisers and pesticides
• Efficient weather insurance• Modern post harvest facility• Rural employment
next previous
PEPSICO INDIA
Contract farming in special variety of Potato for their chips brand Lays
Engaged with farmers in Bihar, Gujarat, Karnataka, Maharashtra
PPP in R&D and Agriculture extension
Technical assistance on latest cultivation practices
IMPACT 11,000 farmers Increase in yields / net farm
income by 40% Price support against volatility
ADM- Soybean revolution in Maharashtra
• ADM has an oilseed process plant in
Latur, a backward district in Maharashtra with no soybean crop.
ADM, initiated extension services in this area.
Agri advisory centres were set up for a cluster of each 20 villages and farmers were introduced to soybean cultivation
Women farmers were trained as they work in fields.
High yielding variety seeds were produced through farmers with linkage to Universities
End to end technical guidance was given to farmers
ADM- Soybean revolution in Maharashtra
IMPACT
2002 : 19,500 HA
2003 : 49,500 HA
2004 : 1,38,500 HA
2005 : 1,75,000 HA
2006 : 1,80,000 HA
2007: 1,86,000 HA
2008 : 2,05,000 HA
2009 : 2,26,000 HA
2010 : 2,43,000 HA
2011 : 2,74,000 HA
2012 : 3,03,000 HA
Interest of FDI• Large Markets• Stable Income Levels in
India• Sourcing of Agricultural
Produce• Festivals and Special
Occasions (Multi-ethnic and Multi-religious)
• Cash Based Transactions• Diversified Consumption
Problems for the FDI
• Limited Working Hours• Working Hours Unsuitable for Indian Customers• Expensive Real Estate• High Salary to the Employees• High Establishment Expenses• Unsuitable for Many Lines of Products• Indian Corporate Retailers paint a sad Story• Younger Demography
Focus• Development of Infrastructure in Rural Areas• Better Price for the Farmers• Effective Utilisation of Grains in the Godowns of Central and State
Warehousing Corporation• Better Processing Facilities• Increasing the Storage Facilities• Better Farming Practices• Better Farmer Education using Modern Technology
THANK YOU