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FDI in retail can create 10 million jobs in ten years

19
Sep '12
The Indian government which recently permitted 51 percent foreign direct investment     (FDI) stake in multi-brand retail, while welcomed by the apparel brands and retailers, is being opposed by a few key political parties.

Crisil Research in a report released yesterday said, “The move to allow 51 percent FDI in multi-brand retailing will attract investments of US$ 2.5-3 billion in the sector in next five years, primarily into the food and grocery segments”.

Most of the brand consultants, apparel brands and retailers, fibre2fashion spoke to welcomed the move. A few however were worried over the ambiguity or lack of clarity on the 30 percent local sourcing clause.

This move by the government can create around 4 million direct jobs and almost 5 to 6 million indirect jobs, which includes contractual employment within a period of 10 years, says the Indian Staffing Federation (ISF) an apex body of the flexi-staffing industry.

"It is expected that the impact of the FDI in retail will have a much wider impact on organized employment than what happened in the IT sector 12 years back as it shall open doors for less skilled and less educated people as well. The impact shall be far and wide and all across the country," it added. 

Mr Punit Agarwal of Promart Retail – a new discount chain, opines, “The retail industry will see a growth of 20% and the policy signifies a positive outlook for the sector. It will be a powerful catalyst for the growth of retail and will definitely boost sentiments and revive the overall economy of our country”.

Mr. Vinod Gupta - CMD of Kolkata based innerwear brand – Dollar considers the policy will boost employment and also streamline all channel sources. Livelihood and productivity will increase at the source level. While, once there is improvement in the process of sourcing, all further aspects in a business will strengthen too.”

Mr Nischal Puri - CEO of Brandis India, which provides consultancy to new innerwear and garment brands explains, “It is an opening up of multiple growth opportunities. Since banks are wary of lending to the retail industry, this move could come in as a shot in the arm for entrepreneurs who would like to enter the retail trade.

“Retail will get the freedom to go beyond domination of big corporate houses. New entrepreneurs will get an opportunity to get into organised retail riding piggyback on FDI in retail. Secondly, share of organised retail could touch 15-20 percent in a few years from the 7 percent currently.

“Lastly the growth that organised retailing achieved in ten years, will now be possible in five years due to this decision. The benefits of this policy will also trickle down to tier II and III towns and cities rather than the eight metros”, he wound up by saying.


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