FDI : An Aspect Of Its Real Threat

#FDIinRetail threatens to turn the entire market uniformly inflationary, unlike present Indian practice in trade of differential pricing over rural to urban locations, and low to high end localities.

Currently, the traders know what will sell in the market they cater to and choose the goods they can price accordingly. So, in the same city, you would find tomatoes selling at Rs 90 a kg in a high income neighbourhood and at Rs 35 in a near-slum area. The extent of Price fluctuation over a period, for whatever cause, is also tuned accordingly.

#FDI in Retail in India would destroy this “just” differential pricing because the huge money pumped in by the few would leave the supply chain largely monopolised, or cartelised. For the BigBiz Retailer, it would be impossible to obtain such pulse over the income terrain of the huge ‘national-wide’ marketplace it would have to cater to, capture rather at the earliest. Even if it could, a differential pricing by the same entity would invite a legal suit that would be impossible to defend and, at the same time, leave it open to the charge of ‘profiteering’ among the buyers.

At the very least, there is a compelling case to regulate the terms of their entry and their operations.



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