Wal-Mart to enter Gujarat via Anand

[utubekhiladi]

I agree UTK. You have made all valid points.

I really fail to see what safeguard they have put in place. It probably fatten some of our major politicians and well fed media houses, or perhaps we are total fools?

Moreover, when is FDI the sole indicator of economic progress? Unless India is exporting, there is no benefit in FDI where ultimately money flows out of the country.

that's precisely what i am trying to say. we already have a huge trade deflict with china and we will soon have trade deflict with usa.

my question is, what do we get in return?

 

[nrj]

There is difference between importing products & bringing in foreign investment. Please don't confuse.

We need investment in our supply chain, be it overseas investors or the domestic. If things work out properly we'll become biggest exporter of Agri goods to China. Beijing is already World's largest importer of agricultural products. It is an opportunity we must not waste.

Sent via Tapatalk from a galaxy far far away

 

[panduranghari]

Have the central government and the state government made legislation(s) to prevent WalMart from flooding India with products from PRC?

There is a serious problem in the US with unregulated cheap imports.

That is one of my issue with the foreign supermarkets. The indigenous industries are already suffering, with multi-retail supermarkets they will be killed. I hear some counter arguments stating they can promote indigenous arts and crafts overseas. I say why can we can promote it ourselves. Why do we need these supermarkets.

One thing that has happened in UK due to supermarkets is the death of corner shop like Kirana maal dukaan. They are few and far between. The local businesses oppose the start up of new branches of supermarkets because the local businesses are undercut. Until recently my profession was not affected, but now the supermarket have also muscled into the Dentistry business. It affects the bottom line. Patients come back but the turn over suffers.

Long term they WILL muscle on to the territories of pharmacies, restaurants, white goods etc.

Its a loosing proposition.

 

[pmaitra]

Exactly.

There is a big smokescreen being created by the corporations. There is not enough information. I still do not see what safeguards we have to protect Indian markets from being flooded with cheap Chinese goods.

 

[panduranghari]

these are the walmarts very own brand.

Major Brands
Sam's Choice
Great Value
Equate
Mainstays
Ol' Roy
Special Kitty
Parent's Choice
White Stag
George
Dr Thunder
Additional brands
Apparel
Homelines
Others

now in barati walmart you will see only the above mentioned brands and chinese brands..

The other major international supermarkets like Tesco, Carrefour, Spar, Marks&Spencers, Sainsburys will do the same. It is a loosing proposition. I for one support Mamta banerjee on this. The local politicians will control the economy even more. These supermarkets need a lot of land and the prime land will, under the guise of being developed, be sold to the supermarkets.

 

[Mad Indian]

If Tamilnadu can be the Detriot of the east, everything is possible. It just needs sound policies.
.

Who are you Masquerading as Oracle? What have you done to him? Show yourself

Mods, Check this guys IP address, I think he is a hacker?

Oh Oracle Where are you?

 

[panduranghari]

Who are you Masquerading as Oracle? What have you done to him? Show yourself

Mods, Check this guys IP address, I think he is a hacker?

Oh Oracle Where are you?

He is not wrong. Is he? Sound policies are definitely a way to go. However, as a nation we should rise above party politics. That is possibly the only way.

 

[Mad Indian]

I heard about a new scheme of investment, in which the PMO directly clears the licenses for those who want to invest?

I mean what shit is that?

This is exactly what the old school socialism did, crush any incentive for free market.

While an average medium or small sized business man has to go through all the bureacucratic hassles to make him lose all his interest in investing in business, the rich corrupt people can get away with investing a lot of money with all the ease. This is not free market

We need to remove the bureaucratic hassles for opening up businesses. For instance, I know that for opening up a Hospital, if you are from a medium- small background with no political backing, it takes at least three years to even get the license for constructing the Hospital. For factories , I think the situation will be much worse. Dont even get me started on the regulations in starting a school.

 

[Mad Indian]

He is not wrong. Is he? Sound policies are definitely a way to go. However, as a nation we should rise above party politics. That is possibly the only way.

I mean seriously, Oracle praising Tamil Nadu? Dont you guys even have a little bit suspicion????

 

[nrj]

I heard about a new scheme of investment, in which the PMO directly clears the licenses for those who want to invest?

Are you referring to recently floated SPV ?

 

[Mad Indian]

Are you referring to recently floated SPV ?

I dont know about the exact name of the scheme, but i Definitely remember reading about it here in DFI. And the person who posted about it was very optimistic about it, though I was irritated to the core when I read it

 

[SLASH]

Why does everyone think that Walmart will destroy the local manufacturers? We talk as if there are no Chinese products being sold by Indian retailers. Chinese presence is already here. Walmart will just organise it better. At least the government will get good amount in customs and excise as the billing will be done as per law. THere will be no under invoicing. Good will be cheaper as the middle men will be removed thus drastically improving our purchasing power.

And its bull shit that we cannot produce at the same price as China. Labour cost in India is almost the same as that of China. Its just that all the American companies went to China first. They have better infrastructure and good government policies that facilitate the growth of their export market. The competition between the Chinese manufacturers is also quite fierce. I have a very positive outlook toward the Indian manufacturing sector. Our prices are comparable to that of China. It is just that the middlemen in India destroy the price structure of products. Walmart would prefer Indian manufacturers over Chinese. I have little doubt about that.

 

[Mad Indian]

Why does everyone think that Walmart will destroy the local manufacturers? We talk as if there are no Chinese products being sold by Indian retailers. Chinese presence is already here. Walmart will just organise it better. At least the government will get good amount in customs and excise as the billing will be done as per law. THere will be no under invoicing. Good will be cheaper as the middle men will be removed thus drastically improving our purchasing power.

You have a point there. Agreed.

And its bull shit that we cannot produce at the same price as China. Labour cost in India is almost the same as that of China. Its just that all the American companies went to China first. They have better infrastructure and good government policies that facilitate the growth of their export market. The competition between the Chinese manufacturers is also quite fierce. I have a very positive outlook toward the Indian manufacturing sector. Our prices are comparable to that of China. It is just that the middlemen in India destroy the price structure of products. Walmart would prefer Indian manufacturers over Chinese. I have little doubt about that.

I think you are placing your hatred on wrong areas. Its not the middle men who destroy the Indian manufactury, but the Indian govt(bureacucratic hurdles, poor infrastructure, corruption, no long term planning, oppressive taxation, what not). Do you have any idea , how difficult it is to open up a manufactury in India? As they say, "In India, the Growth Happens against the govt, while in China, the growth happens because of the govt.". I think that statement sums it all.

 

[amoy]

profit is the biggest amount my friend. lets say if xyz company invests 100 crore in FDI and they make 10 crore as profit each year.. now lets say they do business in india for 20 years. they we have lost 100 crore from our economy to foreign country while company xyz made profits and still recovered the investments.。。。。。

Mission Accomplished. walmart has killed all local competitors and local products while dominating itself and it's brand names. from now customer has only one choice. go to walmart and buy a product that is made and branded by walmart itself or some cheap ass Chinese products. we lost all our local business, competitors and all our local products.

with in few years, walmarts recovers all its initial losses by selling over priced products of their brand names. there is a now huge inflation in the country.

our people just get orgasm when they hear FDI and names like walmarts. they do not understand or try to find out consequences of it.

remember, mission of walmart is to make huge profits for their shareholders and investors, they don't care about you or your farmers or your local business or your local products or your country.

@utubekhiladi I cut short your long analysis. In your hypothesis there're only 2 players Walmart and ABC so that Walmart in the end is able to raise prices after killing weak local competition by cut-throat pricing. But in the real world once India opens up for FDI in multibrand retailing, there's got to be other foreign investors Carrefour, Metro, Tesco and Auchan.... plus numerous local players. It's highly unthinkable that Walmart is able to totally eliminate competition who may be equally big and resourceful, and to achieve monopoly. Still a bloody fight ahead among wolves if not wolf-vs.-sheep.

Besides in practice mega-retailers like Walmart usually sells things in a large quantity, for instance, many scrolls of tissue paper or bundled beverage so that it can churn out a margin by economy of scale. And most of time retailers like Walmart are regulated to be located on the outskirts (like here) of a city, with big parking lots for consumers who'd have to drive a long distance. That's why small (mom-n-pop) stores don't die out in competition. Who'd drive a long way for a say 15% saving on a bottle of drink? ? so actually a market segmentation happens.

Just my experience.

 

[SLASH]

I think you are placing your hatred on wrong areas. Its not the middle men who destroy the Indian manufactury, but the Indian govt(bureacucratic hurdles, poor infrastructure, corruption, no long term planning, oppressive taxation, what not). Do you have any idea , how difficult it is to open up a manufactury in India? As they say, "In India, the Growth Happens against the govt, while in China, the growth happens because of the govt.". I think that statement sums it all.

I do know how difficult it is to start a manufacturing unit in India. But the problem is not nation-wide. In Gujarat it is very easy to start a business. It is comparable to China. The problem is the long chain of distribution and high profit margins set by the distributors. China works on low profit margins and high volumes, while we run on high profit margins and low volumes. It is not the manufacturers fault as they can only reduce their profit margin if their middlemen (distributors) ask for higher quantities. The middlemen do not have the reach like giant retailers like Walmart does. Walmart will need high volumes and therefore will help the indian manufacturers to reduce their margins.

Chinese manufacturers do not get incentives for goods sold domestically. They get huge incentives for exports. Therefore, most of their companies have sales of over 50% in exports.

Another problem associated with imports is that the buyers in India (most of them) under invoice the actual amount. This mean less customs on the goods and thus reduces the price of the product.

 

[ejazr]

First of all this is a Cash and Carry enterprise in which we allow FDI since 1998. There are already a number of stores across the country under the Bharti Walmart brand. This is the wholesale version of these stores. It has nothing to do with the multibrand retail reforms that were being discussed last year.

Since 2006 we allowed 51% FDI in single brand retail which was increasted to 100% last year
We also increased FDI in multibrand retail to 51% subject to some restrictions like only in cities with 1 million population and only in states that approve the policy. Ofcourse, thanks to the opposition and Mamta Di in particular, this innovative step was scrapped

Its about time that we grow out of our East India company fears and start facing the world like the 60 year old economic powerhouse that we have become. Countries from Indonesia to Brazil as well as China have all had 100% FDI in multibrand retail and their local retailers have successfully competed against them. So do we think that Indian retails are so uncompetitive and unintelligent that they will not be able to compete where Brazillians, Indonesians and Chinese have been able to.

The biggest beneficiary will be the farmers and consumers if the FDI in multibrand retail does happen. But in any case, atleast the farmers are benefiting already with these cash and carry enterprises in India. The benefit to the local farmers by Walmart and other major retailers investing in the Cash and Carry sector is perfect example of how a full blown retail offering will multiply the benefits.

Even if you did want time to build local industries and retailers as Nehruvian Socialism would suggest before opening your market to competition, after 60 years of closed retail and another 10+ years of Cash and Carry collaborations, local Indian companies have by now invested enough in competing with foreign companies. Afterall, we didn't get swamped by foreign Telecom companies when the telecom sector was opened. Our local eataries didnt' close down when we allowed foreign single brand retails to setup shop. Then why would it be any different in the multibrand retail sector.

 

[utubekhiladi]

@utubekhiladi I cut short your long analysis. In your hypothesis there're only 2 players Walmart and ABC so that Walmart in the end is able to raise prices after killing weak local competition by cut-throat pricing. But in the real world once India opens up for FDI in multibrand retailing, there's got to be other foreign investors Carrefour, Metro, Tesco and Auchan.... plus numerous local players. It's highly unthinkable that Walmart is able to totally eliminate competition who may be equally big and resourceful, and to achieve monopoly. Still a bloody fight ahead among wolves if not wolf-vs.-sheep.

Besides in practice mega-retailers like Walmart usually sells things in a large quantity, for instance, many scrolls of tissue paper or bundled beverage so that it can churn out a margin by economy of scale. And most of time retailers like Walmart are regulated to be located on the outskirts (like here) of a city, with big parking lots for consumers who'd have to drive a long distance. That's why small (mom-n-pop) stores don't die out in competition. Who'd drive a long way for a say 15% saving on a bottle of drink? ? so actually a market segmentation happens.

Just my experience.

you have just provided one more ammo in my magazine to fire. although i agree to disagree with your comments.

names like Carrefour, Metro, Tesco and Auchan have massive amount of capital in billions unlike our local competitor who can barely put together couple of billions. all the mega retailers like you mentioned are foreign companies and have mammoth capitals to go in for a cut throat competition.. but the problem is local competitors will not be able to handle the heat and will slowly die out. i know each of names like walmart, Carrefour, Metro, Tesco and Auchan will bring in their own brands against our local brands,

plus, walmart alone can sink any competition. be it a carrefour or metro or tesco. you can look at other countries where walmart operates.

now. you have point where walmart will be located outside of the city. but have you heard about ? "neighborhood Walmart"? neighborhood walmarts are only 1/10 size of the regular super sized walmarts. neighborhood walmarts may or maynot even have proper parking space. neighborhood walmarts sells FMCG only. they do not sell TV for example. neighborhood walmart is like a small mom-n-pop store. it can opened any where in a city. i am writing this post from a country which is dominated by walmart. so i know all about how walmarts operates.

 

[ejazr]

I dont know about the exact name of the scheme, but i Definitely remember reading about it here in DFI. And the person who posted about it was very optimistic about it, though I was irritated to the core when I read it

I think you are talking about the special purpose vehicle that the PMO has proposed for infrastructure, mining and oil and gas projects ONLY.

These are PPP projects which are done in partnership with private companies. This is a very positive step because before the private firms would have to bid for the project and then run around to various ministries to get clearances beginning with the centre, then state and then the local council or panchayat causing huge delays. The SPV will first get all the required clearances and then give the PPP project to the private company so that they can just begin the project right afterwards rather than go and get clearances.

This idea of SPV is a very innovative and extremely valuable concept in speeding up PPP projects and will be really helpful in the long term for the huge projects. Espicially when GoI is planning to attract a half a trillion dollars in investments in infrastructure in the next 5 years.

More info here
http://www.thehindu.com/business/article3422133.ece

The note acknowledges that one of the persistent problems being faced whenever there is an attempt to accelerate investments from the private sector is the delay that occurs in securing clearances from multiple agencies.

For example, the note points out that at least 58 clearances are needed at the various departments and Ministries in the State/Central/local levels for setting up a power project.

Floating of SPV

The PMO has proposed that one way of getting around this constraint is to float a SPV, incorporated under the Ministry concerned, with the specific task of securing clearances.

The SPV will become the sponsor of the project and be responsible for securing all clearances before the project is put up for bidding. The SPV will be responsible for identifying projects/blocks, finalising the concept/design, if necessary, firming up the outlines of the proposal, securing clearances and managing the id/auction process. "In a way, the SPV would be hand holding project proposals, bringing them to a certain level of maturity and then pushing them into bidding pipeline. So would be the case with licenses for exploring/extracting petroleum and natural gas or other mineral resources," the note states.

It says there will be many advantages coming in this approach. There will be an increase in the price realised from a concession or award as investors need not factor in the cost of clearance-related delays. There will also be a dramatic reduction in delays in grounding projects or commencing exploration work.

Major change

"The SPV approach would be a major change in the public systems' mindset, moving the responsibility of obtaining clearances from the private party to the government. It would influence investor sentiment in a positive way," it says.

 

[SPIEZ]

And most of time retailers like Walmart are regulated to be located on the outskirts (like here) of a city, with big parking lots for consumers who'd have to drive a long distance. That's why small (mom-n-pop) stores don't die out in competition. Who'd drive a long way for a say 15% saving on a bottle of drink? ? so actually a market segmentation happens.

Just my experience.

And in India there is a large population that doesn't have access to a car.

Such shopping could be futile for them

 

[utubekhiladi]

The biggest beneficiary will be the farmers and consumers if the FDI in multibrand retail does happen. But in any case, atleast the farmers are benefiting already with these cash and carry enterprises in India. The benefit to the local farmers by Walmart and other major retailers investing in the Cash and Carry sector is perfect example of how a full blown retail offering will multiply the benefits.

would care to explain how?

remember, walmarts mission is to make huge profits for their investors and share holders. they are not god sent angels and saints who really give shyt to your farmers. they just don't care about your farmers. their mission is to make huge profits at any costs.

in america every single farmers have debt from 700,000 to 20,000,000 billion usd dollars. yes every single one of them. and these farmers make only 18,000 to 35,000 usd dollars per year. when are they going to pay their debt? this fact is very well explained in "Food INC" documentary. so much for brands like walmarts helping local farmers would like me to explain how brands like walmarts honey traps local farmers in to mountain of debts