Blogspot: FDI in retail, Government defers it, Industry gives a thumbs-up!
While the Manmohan Singh Government has deferred the implementation of their decision to allow Foreign Direct Investment (FDI) in organized multi-brand retail in India, and is still battling it out with its allies and the opposition, I decided to interact with leading players in the Label and Print-Packaging industry to get their views on how this decision will impact their industry and them. The total size of the Indian packaging industry is estimated to be close to 19 Billion US Dollars with a per capita usage of about 15 US Dollars as against the global market size of over 600 Billion Dollars and 100 Dollars per capita usage. The industry continues to grow at a healthy rate of around 17%. With the expected inflow of FDI in retail, this growth is set to get a further boost. The politicians are adamant that the decision will affect their vote banks adversely because they are convinced that the local neighborhood retailer and the farmers will suffer. Contrary to this, the industry leaders are sure that the FDI decision will benefit the farmers with better prices and that the small retailer will stand to be complemented by the presence of organized retailers. They feel, it will drive rapid growth in the packaging industry. . I sent to them a set of questions to answer. I list below the questions and their response. Unanimously they give a “Thumbs Up” to this decision!