FDI in multi-brand retail will result in the strengthening of the back-end supply chain infrastructure for all products, ranging from storage to processing and manufacturing infrastructure, which would reduce post-harvest losses.
Direct purchase by the retailers would also drastically reduce the number of needless middlemen, thus farmers will get better prices for their products. Consumers will benefit from the reduction in prices that would result from the supply chain efficiencies to the improvement in the quality of the products. Food safety standards would also get better with improvised testing and storage facilities.
Lowering of prices would lower inflation and the current incomes of the economically-disadvantaged sections would hence enable them to buy more. Small and medium manufacturers are also going to benefit as 30% sourcing from these industries has been made mandatory. This would provide the necessary scales for these entities to expand their capacities in manufacturing, hence adding up to the employed population and also boosting the manufacturing sector of the country.
New manufacturing opportunities will also open up for the country’s MSME sector. Investments in the organised retail sector will see gainful employment opportunities in agro-processing, sorting, marketing, logistic management, construction, IT and more.
The author studies at the National Institute of Bank Management, Pune. This entry is part of the FE Mastermind contest. Views are personal