Retailing In India

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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From Hyderabad, India: CNN-IBN, a joint venture between the Atlanta, US-based Cable News Network (CNN) and the Indian Broadcasting Network (IBN) is covering the issue of India’s economic times: how to raise consumption in the world’s largest democracy of 1.1 billion people and expected to be the most populous country on the planet by 2050.

After all, consumption constitutes the largest percentage of the gross domestic product (GDP) of the world’s largest economies, and India needs to squarely fit among them, but with a twist: Indians should expect a better life as anyone else among the world’s Big 5 economies of which India is fifth (both China and India will not be among the Big 5 economies if only countries with floating freely traded currencies are considered as the benchmark for economic structure), consuming from disposable income with some to save rather than out of borrowing exceeding their expected incomes over their working lives. Over-leveraging personal incomes has been the undoing of the other world’s largest democracy-the United States.

In this context, political unease with foreign money vying for the pocketbooks of Indians across India’s political spectrum, including the ruling Congress party of Prime Minister Manmohan Singh, is not unusual.

India, beginning in the 1980s triggered a trend of gradually shifting away from the economic protectionism of the days of Gandhi. Gandhi’s protectionism, however, was strategic and suited the times of the political economic globalization of Great Britain’s imperialism. Without it India would not have been able to restore geopolitical justice.

To execute the decision of Prime Minister Singh’s government to permit foreign direct investment (FDI) in the retail sector harmoniously across India, it would be better if India constrains foreign currency inflows to foreign multibrand retailing while protecting domestic brands from FDI and Mergers and Acquisitions (M&A) across national boundaries to encourage competition, and hence, innovation in retailing, between foreign brands and local brands. The rate of imitation is always faster than the rate of innovation in technical change.

The Singh government must accelerate steps to seek greater market share for Indian brands in the G7 countries through bi-lateral and multilateral trade negotiations as the Indian rupee prepares to float.

Foreign expansion, 64 years after independence, can be reciprocated by India.

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About Chandrashekar (Chandra) Tamirisa

http://www.thecommonera.com/Common_Era/Me.html
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