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.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Copyright

All rights to material on this blog site is reserved.
Copyrights rest with either with the owner / author of this site or with those whose ownership / authorship is acknowledged.
Please do not copy, quote, print or publish without permission.
%d bloggers like this: