Multi Brand retailing, FDI

 

The FDI in Multi Brand retailing has generated a lot of interest of late. So what is this MBR? Why the fuss about MBR? Why are some people pushing it so fiercely and at the same time there is an opposing faction which is equally fierce? What does this all mean to us?

 

Well MBR is something very similar to a super market where all the retail products are available under one roof. The only difference with the familiar big bazaars is that the FDI in MBR would bring in the foreign players like walmart,  Carrefour (France ), Metro (Germany) . Currently India offers FDI up to 100% only in the SBR- Single brand retail wherein only a single brand could be sold under one roof- like adidas, reebok, puma, etc.

 

The entry of foreign players in the retail sector would mean access to the most basic items and the most common necessities like our spices or vegetables. For now we allow that only in the wholesale or the cash and carry business only. The entry of FDI into MBR would mean a  little more competition to the local small stores called the mom and pop stores / Kirana stores!

 

 

Looking at the reasons as to why I would support it, I could enumerate a few

 

 

• Introduction of better technology and better storage facilities for the fresh produce like vegetables, fruits, etc
• Competition in the existing market which would mean the quality would have to be on the dot. In other words, quality would take a greater precedence.
• Competitive pricing! Now that there would be many players offering the products, businesses will be forced to compete at the price and the quality arena to attract the customers.
• A good sign for the farmers is that their produce can find a competitive market as well and translate that to meaning that their produce would be better stored, thanks to the refrigeration and preservatives.
• Generation of local employment, a big company coming in and setting themselves here would need man force and thus generate employment to the locals which would answer a lot of the money woes.

 

Coming to the negative list:

 

• The presence of big companies pose a threat to the small mom and pop stores which can’t easily compete with the big brands
• It would drive out the small businesses out of the jobs
• Farmers would come under the mercy of the big companies eventually cos the big companies are driven by profit and not a social idea
• Small and medium enterprises would have to close down since they cannot face the competition.

 

Trying to analyse things,

 

 

I can see that the role of the mom and pop stores may change but given the fact that these huge stores would be located far off and the amount of time involved in billing, I would still prefer the small stores. Also talking about the fears of people going out of jobs, I think it would generate more jobs than those that would be lost. Also most mom and pop stores run on the concept of light loans, no wonder it would be a hard bargain to move from them to the big chains at ease. From my side I would really vote a go ahead for the FDI, maybe not the total 100% but atleast 51%. Every policy has an opposition, the NEP of 1991 also did but it turned out to be a great decision.

 

Maybe it is another one of those tough decisions. But from where I see it, I don’t see many complaints against FDI in MBR. What about you?

NAM 2.0 and the relevance in a changed scenario

It sounds like a software update whenever I see the numbers 2.0 appended to an acronym like firefox 11.2 or a chrome 20.1 etc. It was quite witty to coin the foreign policy a NAM 2.0 on the same lines and regarding the updates it provides, there are some terms which I found quite in line to be appreciative about. The basic theme remains the same, we don’t swear allegiance to any of the power factions, we still maintain and respect our own autonomy in decision making and also the autonomy of other countries as well. That’s that for a brief intro on what I will be trying to talk about here.

 

Going a little into details, a small overview of the NAM would help. NAM certainly shaped our foreign policy for a long time, it strengthened our stand and belief to withstand the global pressures and maintain our autonomy in the foreign affairs and the relations. The new NAM dubbed as an update 2.0 calls it under a different name- “Strategic autonomy”. Why the choice of word strategic? Again I think it makes a valid point cos when the NAM was coined, India was not in a position to be strategic for it was a country just into its independence having neither an economic strength nor a stable policy. Over the years India has proved its worth in many fronts, especially the most recent economic crisis has proved the strength as an economy and the participation in the international for a proving its importance and recognition too. The replacement of the G8 by the G20, the importance associated in international meets, the importance of having bilateral deals with the country have all endorsed the idea of the word “strategic” proposed here. I believe the word strategic takes an economic front and an personalized perspective here.

 

So the question still remains. Is NAM still relevant? NAM at its inception was directly associated with the cold war situation. Now, it doesn’t seem to make a direct reference to any of it cos there are no more of the two opposing factions anymore and there is neither a race to prove who is the strongest. The concept has changed and so has the meaning of NAM. And that’s the reason why the NAM 2.0 takes precedence here. The strategic economy acknowledges India’s changed position, where the goal is not just peace and working towards development but sustenance and growth. It is not at a position where it has to receive benefits or grants as a beneficiary but is in a position to drive growth and play a larger role in the neighbourhood helping the overall growth in the region as a benfactor.

 

The relation with its neighbours is dealt at a greater importance in the NAM 2.0 which is again a very sensible suggestion considering that Asia offers a great opportunity of growth and the reduced dependence on the west for economic developments. This is further endorsed by our growing interest in the relations in the surroundings. The look east policy has changed our view saying that development and growth is not unidirectional, looking at the west anymore. The east has an equally strong role to play. The recent FTA with ASEAN, the bilateral developments, opening of markets with S.Korea, Japan all seem to prove a bigger point that the dependence is no more a set of one or two countries but individually strong ones and each has to be treated at its own merit. And understanding this idea, the NAM 2.0 proposes the same.

 

So to answer the question as to whether the NAM 2.0 is relevant, I would say it very much makes its stand strong and clear. The ideas have changed, the roles have changed, but NAM still stays a longer way to come. The independence of thought, the deft, delicate relations to be handled have changed methods. It is not the two military or economic factions any more but individual delicate relations which don’t need allegiance towards any factions or restrictions imposed with a policy or an ideology. It is widening the options the country has and providing a greater position of bargain to arrive at. The changed role from a beneficiary to a benefactor certainly seems a strong driving point for the coinage- ‘strategic autonomy ’ and the update NAM 2.0 cos the basic still remains the same- playing no particular favourites.