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Mgmt Students Views On FDI in multi-brand Retail

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Thiruvananthapuram/Delhi - Powerful and articulate stances for and against foreign direct investment (FDI) in multi-brand retail emerged as student representatives of Asian School of Business (ASB) and Kansas University School of Business (KU), USA made their presentations here.

At a seminar on ‘FDI in Multi-brand Retail in Kerala' organised by ASB, management students took over to dwell and debate upon the wider implications of FDI, even as Kerala Government has unequivocally opposed its introduction in the state.

Mr Vishnu K Nair, first year student of PGDM at ASB drew out the salient points of the Indian and Kerala economy with special reference to the retail sector. "India ranks among the top 30 developing countries for retail expansion worldwide; the country is placed fifth in the Global Retail Development Index. Kerala is heavily dependent on local ‘kirana' stores; they are the active providers of consumer needs," he said.

Presenting her case in favour of FDI, Ms Meg Reesing, student of Bachelor of Arts in Global and International Studies at KU, said consumers can access greater variety of products at lower price, farmers can sell directly to retailers besides increasing convenience and shopping experience. FDI will also create new employment opportunities to the tune of 10 million in next three years, she added.

Students Views On Multi-brand Retail

Ms Amy Van, student of Bachelor of Science, Accounting and Finance, KU, countered by putting forth disadvantages of FDI. "FDI will lead to large-scale job loss, replace small retailers and lead to the creation of monopolistic and oligopolistic markets," she said.

Student presentations were followed by panel discussions, in which Mr Vijaya Raghavan, Member Secretary, ASB; Dr Anuradha Balaram, Chief Economic Adviser and Prof Eric Jepsen, political scientist and Fullbright-Nehru Scholar participated.

Competition that arises from the entry of large houses in the retail sector will lead to increased quality of service among small players and thereby enhance business, said Mr Vijaya Raghavan. "Though in the short-term some churning up might happen, new businesses offering more employment opportunities will come up in the medium to long term. Small players will become vigilant and up their customer offerings."

Dr Balaram said that Kerala being a consumerist society, consumer welfare should guide any concomitant policy. "Change is inevitable, but there are both opportunities and threats that come along with the change. A mechanism should be created wherein both large and small can co-exist."

"Organised retail can bring additional sources of revenue for the Government at the state and local levels. The enhanced revenues can be transparently used to create capacities among those groups made vulnerable,"
Dr Balaram said and added that organised retail can be encouraged to take up corporate social responsibility (CSR) projects to create goodwill.

Prof Jepsen said that the world has for long waited for the retail sector to open up in India. "India has not however fully leveraged its strong negotiating position with regard to overcoming constraints while introducing FDI in the country," he said, adding that both the benefits and disadvantages have been rather "overstated."

Summarising the key points of the discussion, Prof S Rajeev, Director, ASB said that technology can be more efficiently harnessed to create transparency in all dealings vis-à-vis FDI. "Indians have been suspicious of entry of foreigners on account of the bitter experience following the entry and taking over of the East India Company."

In the interactive session that followed the panel discussions, students from ASB, other city colleges including LBS Institute of Technology, and KU raised queries on the far-reaching impacts of FDI.
Mr Niranjan J Nair, second year student of PGDM at ASB welcomed the audience.

Students from KU are here in ASB as part of an annual student exchange programme. They will be here in the city until January 17.

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