FDI in Retail: Opportunity or Threat

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Recently Commerce and Industry ministry proposed a proposal to government for allowing FDI in Retail sector. The industry is getting hot after this proposal is being made. Retail sector is a sunrise sector with high growth potential. Till now India comprises 5%organised and remaining unorganized sector and expected to reach 10% by 2012. The factor that drives this growth is rise in Demographic profile, consumers aspirations, growing income of middle class family. Coming to the point that Is that good for India or not. The answer is yes because by allowing FDI in retail sector our economic condition will be strong and many more advantages along with disadvantages. Currently government has allowed 51% FDI in single brand Retaling and 100% in cash and carry business. Presently big Retailer are operating in this cash and carry business. For instance Walmart, Tesco to joint venture with different Indian companies.
Why FDI in Retail- As in first paragraph I have written that since 2006 government has allowed 51% FDI in single brand retailing. As far as new proposal are concern Government is going to allow up to 51% FDI in multi-brand Retailing only if it passes through various process of Indian Government. The very first reason for this proposal is our economy condition will be strong, strong distribution network, local employment, Improve in Infrastructure and many more. The second one is discouraging the player which is not serious in this sector. Government has seen condition of economy before and after FDI.
But some conditions- It is very obvious that government has also fear that If big players like Walmart, Tesco, Carrefour will enter into this segment they will destroy local vendors. so, Government is going to put some condition in this game. Conditions are as followings for Multinational players-
1. The very first condition is If a foreign player will enter than they have to procure goods from local manufacturers.
2. The second one is there will be 50% reserve employment for rural youth.
3. According to proposal players have to spent 50% of FDI in Infrastructure, logistic and agro-processing.
4. Paying attention towards agriculture food processing to boost Indian economy.
5. For protecting local vendors these retailers can operates only in big cities where minimum population is one million.
As far as my understanding is concern it is sure that our economy will boost but what happened with other players. There will be high price war in this sector that leads to destroy local players. But I am not sure would it be success in India due to Infrastructure problems. lets see what happened............

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