Thursday, 24 November 2011

Retail Therapy

While industry watchers and policy makers makers must be licking their fingers at learning the 51% approval being granted to FDI in multi-brand retailing, it is important to acknowledge the fine print of this business and the red herring. In the globalized and closely integrated economies of ours, this to happen was a given, sooner or later. I'm glad it happened later, as it has given ample exposure or localization expertise to our homegrown bulk retailers like Future Group, Reliance, Tatas, Bharti, Mahindra, et al. to cement their positions and can only grow stronger from here on. Govts. dragging their feet for years on policies like this, and faulted for being slow decision makers, or pandering to vested interests, eventually benefits the country and protects its interests hugely when seen in the overall context, certain groups or individuals benefiting greatly notwithstanding. And now that every one is being allowed in, wonder whats going on in the mind of those overseas retailers who must be gearing up with their India strategy. I'm sure getting a grip on prices, and milking the vast consuming class is the message their bosses would have sent out loud and clear. In an economic setup like ours, where the country is a net importer, despite the recent boom in IT, or manufacturing, textile businesses, the fact remains that we are dependent on some of the most essential commodities for sustainance from the rest of the world; that includes energy, fuel, food, and very soon nuclear supplies for power generation too.

So while we dig into other western economies snatching away their jobs, as a worthy cost effective destination for global businesses, it wouldn't be surprising to see those very economies making life difficult for us to enjoy that growth because of our high dependence on imports from them.

Something is expected to give way, either mellowing of rising salaries/GDP growth of our economy or a more supply constrained inflationary economics, where high premiums will be attached to key raw materials, commodities and all those essentials resulting in slowing of the Asian juggernaut.

Hope policy makers take a global view of all their decisions and not just a narrow domestic view, which perhaps worked fine in the years gone by; not any longer.

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