Business Today

Should the government allow FDI in multibrand retail as a long-term strategy to combat inflation?

Most agree that foreign direct investment, or FDI, in multibrand retail will be a right step. So far, any suggestions by the government in this direction have been resisted by the Opposition. Even in the government, there are sections opposed to it.

     Print Edition: March 6, 2011

Most agree that foreign direct investment, or FDI, in multibrand retail will be a right step. So far, any suggestions by the government in this direction have been resisted by the Opposition. Even in the government, there are sections opposed to it.

They argue that the entry of global retail giants will sound the death knell for kirana stores that dot the retail landscape in India and employ some 33 million people. But the time may have come for the government to bite the bullet and permit FDI in multibrand retail.

That may be the key to easing the massive supply bottlenecks, especially in the agricultural sector, and reining in inflation. These are among the reasons why most of the developing economies have permitted FDI in the retail sector.



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