Is FDI a different ball game? That day I went to a grocery shop near to my house in my locality.

The shopkeeper was growling over opening of a new supermarket near the corner of the street. Though the competition would be there for him, he said convincingly, he would survive. This actuated in my mind thoughts about the FDI reforms announced recently. Are these reforms going to prove frivolous? Will they have any solemn impact? Lets fathom into what these reforms have in store for us. FDI stands for Foreign Direct Investment. When a company invests directly into production or business in another country, either by buying a company in or expanding operations of its business in target country, it is called FDI. Euphemistically, FDI is more of a conundrum an imminent step for the economy to grow, holding immense political and social implications in a package. Amongst much hue and cry, Govt. of India announced higher FDI equity (51%) in multibrand retail and aviation. Foreign retails, such as Wal-Mart, Carre Four, Tesco Plc, can now set up in cities with population of 1 million or more, and must source at least 30% goods from local, small industries. However, State governments have freedom to decide whether to allow supermarkets in their states, and minimum investment $100 million, half of which should go in rural areas. For Aviation, foreign carriers can hold up to 49% in local airlines. Hitherto, foreign firms were allowed to operate as wholesale outlets. FDI carries in it a negative shade .It can throw out small retailers in local shops (Kirana). Supermarkets buying goods on low price and selling it on lower price than small, retailers will detriment business of small retailers. Moreover, jobs in manufacturing sector may be impacted, if goods are procured from international producing units. Consequently, inconspicuous job loss is a negative outcome of FDI. In addition to this, Wal-Mart is already under investigations in US for bribing Indian officials. Does it not alarm us that these foreign investors are now going to partner us? Multinationals, which aim at profit maximization, focus on lowest costs and higher prices. In the process, they sacrifice the traditional, generic relationship between source, supply, and shop. Domestic players are

going to face a stiff competition against foreign brands, and in absence of muscle and skill, they may tend to fade away. Any positives FDI can offer? Yes, definitely. Govt. claims that FDI will create as many as 10 million Jobs! Prophecy seems a new skill our Govt. has acquired. Jokes apart, experts do agree there will be over thousands job opportunities. FDI is expected to curb about 15 to 25 per cent food wastage, which happened owing to inadequate infrastructure. FDI can prove beneficial in establishment of cold storages, transportation, cold chains, etc. The farmers will be benefitted directly, as there will be no middlemen. Consumers, on the other hand, will get the best value and retail shopping experience. The liberalization era which once commenced with 1991 reforms, when Dr. Manmohan Singh was our Finance Minister, has manifolded, and transgressed into a much exacting economic need, which led to FDI reforms at present. So, is FDI a different ball game for us? Whatever good or bad FDI holds, lessons from its history in other countries and in-depth context study would aid to fruitful implementation in our country. We have cases across the world, as from China, Thailand, Malaysia, Philippines where FDI has not caused any major unemployment on introduction to FDI, but India has a big unorganized retail sector, and need expert analysis. Protectionism on farm -retail chains is one action in scope to yield best returns from FDI. Close regulation on any FDI- retail licensee for purchase pricing and retail selling, actual commitment of employment growth, benefitting country in terms of taxes earned would pave the way for better FDI reforms in future. .