This is how Indian government thinks of FDI

• Common people: It will create up to 10 million (100 lakhs) jobs in next 3 years
• Farmers will get more than 12-15% of the consumer price they get for fruit and vegetables. 70% of retail is in food items and these are mostly sourced locally. Government will have the first right over procurement of farm produce.
• Consumers will get products at cheaper prices, as competition will bring down price.
• Small industry: 30% Mandatory sourcing from small-scale sectors will help small industry. Ikea already sourcing 30% of input from India.
• Back end infrastructure: Approval only after investor meet all conditions, including 50% investment in back end. This will being several billion dollars of Investment in retail and the infrastructure will develop.

And its answer to one who protest

• The subject is in the concurrent list and the Center has the power to make laws
• States can stop retailers under the local laws
• The retail companies will build the back-end infrastructure that is vital to cut wastage in India's $450-billion (Rs 2.3 lakh crore) retail industry.
• Only 53 cities out of 581 towns and cities in India will meet the one million norms (a minimum of 10 lakh population).
• Countries like China, Brazil, Indonesia, Chile allow 100% FDI and have seen tremendous growth

But what about the Indian Retailer?

• There are approximately 1 crore 40 lakhs retail shops. We think that 70 lakhs of these retail shop will have to close their doors.

• Only 5% of it is organized retail. Organized retail is often mistaken with a retail with a self service system with barcode and computers. Organized retail means much more than that.

• Most of the retail business is family owned business where they think of profit = sale – cost. Most of the time they do consider their own salary, interest and rent as cost.

Which Indian retailer will survive?

• Those who has already earned a lot to be sufficient for next 2-3 generations.
• Those who has diversified have alternative source of income or whose next generation are in to jobs such as engineer and doctors.
• Those who are really converting there business in to a organized business using systems and process.

• Stock Productivity
• Area (Space) Productivity
• Staff Productivity
• Sales & Purchases
• Trade creditor and debtors
• Bank and Cash balance
• Profit margin
• Control expenses and other cause of erosion of margin
• Customer satisfaction.

Please share your thoughts.