The Negative Effects of Permitting Hypermarkets and FDI in the Retail Industry in India

10 Pages Posted: 28 Apr 2010 Last revised: 30 Jan 2011

Date Written: February 14, 2009

Abstract

In the open economy system, under the disguise of global competition, it is felt that almost all trading activities are aimed at promoting MNCs and major Indian players in the field. There is a fear that the local but small organizations will become causality in this competitive war as they are subjected to an unfair trade war. The government of India is keen on permitting FDI in the retail industry and many foreign or Indian based foreign organizations may take part in these trading competitions that will kill the local trading community. The already existing super market culture has prevented the growth of small time retailers in urban, semi urban and rural areas. It is estimated that about 50 to 60 lakhs of such smaller retailing organizations will be hit by the mall culture. This will also cause an unemployment problem and give a violent blow to small-scale entrepreneurship, as the small traders should make a forced exit. Most of the Indian and foreign high class magazines highlight the dreamy wonders of super and hyper markets, whereas the basic question lies that what will be harvested through the principle of hyper marketing by the below poverty line people of India who make 30% of the total population. The hyper marketing system will also control advertising, retail selling, branding and ultimately the schedule of manufacturing industries. After some time the manufacturer will be at the mercy of the mall owners and their freedom to manufacture, fixation of price for their goods, bargaining power etc. will be curtailed. This article tries to give a picture of the negative effects of the hyper marketing system and FDI in the retail industry that has to be addressed before the Indians are subjected to a Retail Colonization War.

Keywords: FDI, Super and hyper markets, retail, colony war

Suggested Citation

Veeravalli, Devanathan Sevilimedu, The Negative Effects of Permitting Hypermarkets and FDI in the Retail Industry in India (February 14, 2009). Available at SSRN: https://ssrn.com/abstract=1343405 or http://dx.doi.org/10.2139/ssrn.1343405

Devanathan Sevilimedu Veeravalli (Contact Author)

Srimad Andavan College of Arts and Science ( email )

Tiruchirappalli
Trichy, Tamilnadu, India, Tamil Nadu 620005
India

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