Last week Indian Cabinet allowed 51% FDI( Foreign Direct Investment) in retail sector. The reaction have been extreme. Existing players in the retail sector are happy. while small shop owners and many political parties are totally against it. some parties have called for national shutdown.
Many business houses already in retail sector have claimed it would lead to higher competition, lower costs for customers, more jobs. I am concentrating only on one point- higher competition and lower costs. This is very simplistic assumption. As pointed in my previous post the costs in retailers like Croma and Vijay sales have been higher than small retailers. The prices have been whopping 12% higher than small retailers.
So the assumption of lower costs has not been true in the past as per my experience.
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