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1. From 1st point in PDF 2.

From 2nd point in PDF (supporting point) (support point for point 2)The proposal of the Union Cabinet on Friday to allow 51 per cent foreign direct investment (FDI) in multi-brand retail clears the deck for multi-national chains such as Carrefour, Tesco and Walmart to set up shop in India, but with riders. (support point for point 2) Further, it says the foreign investor should make a minimum investment of $100 million, 50 per cent of which should be invested in back -end infrastructure. Also, 30 per cent of the products must be be procured from small-scale industries. 3. What does it mean for Us (support point for point 3) It also states that fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. For the purpose of FDI in multi-brand retail, the note describes small industries as units which have a total plant and machinery investment not exceeding $250,000 (around Rs.1.25 crore). This investment refers to the value at the time of installation, without providing for depreciation. The foreign retail chains will be required to comply with self-certification. They have to keep all records, and the government will have the first right to procure agricultural produce. (support point for point 3) As for the back-end investment, it states that investments made towards processing, manufacturing, distribution, design improvement, quality-control, cold chain, warehouses and packaging, will constitute back-end. Retail chains will be allowed only in cities with a population of more than 10 lakh as per 2011 Census. There are 51 cities with a population of more than one million, based on 2011 Census. 4. Is India Ready for Multi Retail? (support point for point 4) Indias retail sector has undergone a rapid transformation over the past decade and this process is expected to strengthen in coming years with the rise in population, per capita income and urbanisation. According to the provisional estimate by the Census of India 2011, the countrys total population has reached nearly 1.21 billion compared to the 1.03 billion recorded in the previous census of 2001. This tremendous growth in population has led to an unprecedented scale of urbanisation, with the share of urban population increasing to 31.0% in 2011 from 28.0% in 2001. According to the United Nations, India has the highest rate of change in its urban population of all the BRIC nations and this figure is likely to remain above 2.0% annually for the next three decades. Nearly 64% of the Indian population is in the working age group of 15-64 and 35.0% is relatively young, aged 15-34. As per IMF estimates, the per capita GDP of the country was INR 46,221 per annum at end- 2011, a figure that is forecast to rise to INR 58,224 by end 2015.

With Indias growing per capita income and a rising middle class, the r etail sector has the potential to be the real growth engine of the countrys economy. While demand for a superior shopping experience is evident in the metropolitan cities, the Tier II and Tier III towns are also rapidly acclimatising to the changing landscape of the Indian retail market. Growing consumerism, changes in consumers tastes and preferences, and heightened brand consciousness has been fast replacing traditional mom and pop stores with organised retail malls that house lifestyle and luxury brands from national and international retailers. 5. Key to speed up retail transformation (support point for point 5) In an important policy move, the Indian government gave permission for up to 51% FDI in multi-brand retail in September 2012. The objective of this policy is to boost the retail business through adoption of international standards and practices. The entry of international products, practices and technology is expected to enhance the efficiency of domestic retailers. The government has made it mandatory for foreign multi-brand retailers to place at least 50% of their total investment in back-end infrastructure, thus giving a boost to facilities such as logistics and warehousing.

With multi-brand retailers exploring opportunities in India, demand for retail space is likely to rise significantly. This will induce developers to launch new malls and, as store size requirements are significantly higher for multinational retailers, will encourage them to build larger malls along with sufficient mall infrastructure. Quality will also receive a significant boost as the malls will be constructed to meet international standards and norms. The competitive environment is likely to enhance the productivity and efficiency of domestic retailers; with better and more transparent pricing, sales will improve significantly. Domestic retailers will also leverage their portfolios by adopting many of the new retail strategies followed by large international retailers.

The average size of shopping malls in India has already begun to increase as developers focus on larger spaces. The success of a mall does depend on its size as superior grade malls are nearly double the size of average grade malls. It is estimated that the average size of a superior grade mall is 400,000 sq ft, whereas the normal size of average grade and poor grade malls are 190,000 sq ft and 150,000 sq ft, respectively. The larger malls allow for a complete tenant mix in various formats and categories, and can adopt modern mall management practices easily. With the introduction of FDI in multi-brand retail, the average size of a mall is likely to increase as foreign retailers tend to occupy

large spaces. As a consequence, both total mall supply and size are expected to increase over the medium to long term. 6. Advantages: It would provide an additional marketing channel for the farmer. When the corporates start outsourcing their requirements directly from the farmers, the latter would be weaned away from the clutches of the exploiting middlemen. Removal of superfluous middleman would ensure higher net price realization for the farmers. Higher investments may result in the creation of infrastructure, warehousing, cold storage and new supply chains. Direct selling of the produce by producers to the retailers will reduce wastage, especially in perishables. Infrastructural and technical requirements in the new multi brand stores may stimulate intensive consumer research and result in product innovations and better customer services. The arrival of multi brand retail giants to retail would compel traditional kirana shops to take strategic decisions like modernizing their store and being smarter . 7. Gains for Stake holders (supporting points from the paper sent) Farmers Rural Youth Consumer Small industry Small retailer

8. Challenges faced by Indian economy (supporting points from the paper sent) 9. Miscellaneous Indian market will be flooded by Chinese Products

(Support point) Entry of goods into a market is not a function of FDI policy but of the export import policy. If foreign goods are imported into the country, Indian goods are also exported to other countries. Therefore, two way trade is a feature of the current globalized world Foreign retailers will resort to predatory pricing (Support point) A strong legal framework in the form of the competition commission which covers all sectors, is available to deal with any anti-competitive practices, including predatory pricing. The calibrated approach provided in this policy will ensure limited presence of such entities which would make it difficult for them to stifle competition. On the other hand, however, the squeezing of distribution margins through supply chain efficiencies would prompt the existing retailers to reinvent themselves, thereby benefitting the consumers. One of the criticisms of some of the international retailers is that their low prices are possible on account of exploitative labour/employee practices adopted by them. India has oneof the strongest set of labour laws and regulations in the world, a proper implementation of which would ensure that such players do not resort to practices that violate these laws/regulations. This policy cannot be imposed on the states (Support point) This is an enabling policy framework. It remains the prerogative of the states to adopt it or not. This federal spirit has been specifically recognized in the current decision. FDI policy does not override the extant laws governing, trade and commerce in the country. The State Government laws and regulations in this regard would apply as much to the foreign players as to the establishment of any domestic businesses in the retail sector. Weakness Small orders and customers may be ignored. Global sourcing of products and long transports are hugely energy intensive and customers are likely to get refrigerated or frozen produce instead of farm fresh produce. Retail being astute subject, problems like multiple state entry taxes, octroi may crop up