FDI in retail should provide the much needed boost to the real estate market.... It would provide much needed capital to cash strapped retail industry... fuel their expansion, create more jobs... and to top it all will trigger consumption within the Indian middle class.

Am i too overtly optimistic? What are the general views of the group?
Read more
Reply
12 Replies
Sort by :Filter by :
  • FDI in multi-brand retail to push growth: Goldman Sachs

    Mumbai - India - News - Sports - Entertainment - DNA
    FDI in multi-brand retail to push growth: Goldman Sachs

    PTI / Wednesday, December 5, 2012 21:06 IST
    FDI in retail is necessary to push GDP growth and deal with high current account deficit, besides bringing in technological improvements into the sector, US investment banking giant Goldman Sachs said on Wednesday.

    "Every 1.7 dollar of foreign investment can generate one dollar of GDP growth, which is the lowest amount, simply because it has so many different linkages as opposed to putting in an additional dollar in banking," Goldman Sachs India Managing Director and Chief Economist Tushar Poddar said after announcing its India outlook for 2013.

    He said that in the medium-term there are several benefits of FDI in retail to the economy. "There is very high current account deficit, so we need FDI, we need inflows."

    The government today won an Opposition motion against 51 per cent FDI in multi-brand retail with a comfortable margin in the Lok Sabha. The motion will be voted up on in the Rajya Sabha on Friday.

    The country is running a high current account deficit (CAD) on the high trade deficit back of rising imports and steeply falling exports. In October, the trade deficit jumped to a high of USD 21 billion.

    Similarly, CAD touched a massive 4.2 per cent of GDP in the last fiscal after touching a record high of 4.5 per cent in the March quarter. Though in the first quarter of this fiscal it tempered a bit to 3.9 per cent of GDP.

    The foreign direct investment in the sector brings technological improvements as it generates back-end structure, Poddar said, adding, "it also creates linkages to the economy".

    Moreover, he said, every dollar of investment made into the retail, generates more into GDP growth then in any other sectors.

    However, Poddar said the quantum of investment would depend on factors such as the number of states which implement it as also the number of cities it is allowed in.

    Last week, Goldman had forecast the domestic economy to grow from 5.4 per cent in 2012 to 6.5 per cent in 2013 and remain high through 2015-2016.

    It had also upgraded the country's stock market to "overweight" and had pegged a December 2013 Nifty target of 6,600 points.

    The brokerage cited three factors for the optimism such as a decline in oil prices in real terms over the next few years, a more favourable external demand outlook and domestic structural reforms which can ease some supply-side constraints, according to Goldman Sachs.

    URL of the article: FDI in multi-brand retail to push growth: Goldman Sachs - India - DNA
    Permission to reprint or copy this article or photo must be obtained from Buy photos, news, articles - Content from India
    © 2005-2012 Diligent Media Corporation Ltd. All rights reserved.
    CommentQuote
  • FDI in Retail: Its impact on the retail & realty sector

    FDI in Retail: Its impact on the retail & realty sector

    FDI in Retail: Its impact on the retail & realty sector - Moneycontrol.com
    FDI in multi-brand retail will have two fold impact on the Indian real estate sector. Firstly it will increase demand for anchor space in one million plus cities where the state governments agree to permit foreign retailers & secondly there is a possibility that rental expectation would be raised, as not much of quality space would be available, suitable for big-box retail.

    For multi-brand retail, anchor space in upcoming, under construction & project launch stage malls, Indian & existing foreign companies are either in negotiation stage or signed up space at these new upcoming projects, which will put the new entrants in a tight spot, as they will have to look for only new upcoming projects going to be operational only after 3-4 years from now.

    In India, per capita mall space among top 7 metro cities is presently estimated at less than a square feet, with US & Europe average being 20-40 times of India. Steady GDP growth & young population having more disposable income, can attract investment for mall development in India. As compared to developed market, the square footage in our country is very low & there is steady increase in rentals due to shortage of available quality retail space, this could trigger new projects.
    CommentQuote
  • Yes, agreed. In the major metros the reality will now further gain steam.
    CommentQuote
  • it is a definite positive for real estate more so for high consumption oriented cities like Delhi NCR, Mumbai, Bangalore etc.
    CommentQuote
  • because of loksabha passing FDI bill price in will rise in retail shop or office space or residence?
    CommentQuote
  • should also give boost to the real estate players like DLF which have been slagging with low growth in retail and mall space over last few years...
    CommentQuote
  • YEs - i guess so as well... considering more retailers opening shops in big cities, would mean more job creation, would mean more influx of population from smaller towns to cities, would mean more pressure on the Real estate.

    Originally Posted by snitesh
    Yes, agreed. In the major metros the reality will now further gain steam.
    CommentQuote
  • Infact one of the excellent speeches today was from Deppinder Hooda . Hats off to the young man for taking on a veteran speaker who is known for her oratory sushma swaraj . some extracts captured in this article

    -------------------------------------------------------------

    Congress MP from Rohtak, Deepender Hooda, on Wednesday took on the opposition, and said the UPA government's move to allow FDI in retail would give the farmers of the country an alternative.
    Hooda said that he understood very well the problems of the members of the farming






    community.

    "I know FDI will not solve all the problems of farmers, but it gives them an option. I am the son of a farmer, I understand their problems. Do not underestimate the farmer of India? They are not fools, they will sell to the person who gives them the best price," he added.

    Hooda said the BJP was opposing FDI in retail because it was a UPA government's move, and launched a frontal attack on senior BJP leader Sushma Swaraj over her claims that McDonald's bought its potatoes from outside.

    "Even McDonalds was shocked at what Sushmaji said and came out with a press statement to say they buy most potatoes from India. We found out where McDonald's buys it's potatoes from - most come from Gujarat. That state has the most McDonald's stores But as soon as this potato comes out of the ground, BJP is quick to term it as American," he added.

    Hooda further questioned Sushma Swaraj whether she he had exactly been to Ambala in the recent days.

    "Sushmaji spoke of being from Ambala but I think she has not been to Ambala in quite some time. There are 'kirana' stores that co-exist with multi-brand retail chains... there are at least 15 stores run by Reliance, Easy Day, etc," he said.

    The Congress MP pointed that it was left to the states to decide on FDI in retail, and added that this move strengthens the federal polity of this country.

    Hooda charged the opposition of raising objection on every developmental move of the ruling Congress Party and cited the example of computers, Delhi Metro etc. to justify his statement.

    "It may be remembered how the opposition members protested against the Bhakra Nangal dam, saying Congress will take away the electricity from the dam. Today, the same dam irrigates vast tracts both in Haryana and Punjab," Hooda said.

    "The same applies to the computer technology, the Dunkel draft and now the FDI," he added.

    He also asked the BJP to think on why the Congress-led Governments have ruled the country for almost 50 years in the last 60 years.

    "Sushmaji said 50 of 60 years have seen Congress-led governments. I ask her to consider why the people keep voting for us... if you continue such opposition, in 2014 the people will vote for us once again," he said amid a thumping applause from the Congressmen, including UPA chairperson Sonia Gandhi.
    CommentQuote
  • Originally Posted by kinjalchato
    Infact one of the excellent speeches today was from Deppinder Hooda . Hats off to the young man for taking on a veteran speaker who is known for her oratory sushma swaraj . some extracts captured in this article

    -------------------------------------------------------------



    My foot. Did you watched the reply of Sushma Swaraj on his speech? Dumb-ass said he will grow 24 inch potato so that Macdonald can buy them for making French Fries. LOL Sushma taken over this statement and made him look like a jackass in front of entire parliament.
    CommentQuote
  • Originally Posted by Dheer
    My foot. Did you watched the reply of Sushma Swaraj on his speech? Dumb-ass said he will grow 24 inch potato so that Macdonald can buy them for making French Fries. LOL Sushma taken over this statement and made him look like a jackass in front of entire parliament.


    everyone have right to their opinion , does not matter whose foot . like sushma swaraj was made to look like a greenhorn when mcdonalds contradicted her statement on importing potatoes. That follwed by kapil sibal contradicting her claim of violation of international trade laws . she is a great orator no doubt , but should do more due diligence .

    do not know who fed her the mcdonald crap , really dented the credibility of her claims. looks like she got it wrong on pepsi also , must be one of her bad days because normally she is very good.

    http://www.firstpost.com/business/mcdonalds-denies-sushmas-remark-says-it-sources-ingredients-locally-545600.html



    http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/fdi-debate-leaves-a-bitter-taste-for-mcdonalds-pepsi-kfc/articleshow/17485083.cms

    and some walmart friendly guy wrote this article , with whose title i do not agree, but tries to address some of the contradictions in her speech . do not know whom to believe

    http://www.firstpost.com/economy/fdi-debate-why-sushma-swaraj-should-get-the-stupid-statement-award-545639.html/2
    CommentQuote
  • I wathced the full debate. Hooda reference of 24inch potato was in humorous way.... in answer to sushma argument that Mcdonalds is not buying potatoes from india being smaller in size. Today she was made to eat her words as most of the potatoes are being sources from Gujarat. Sushma's final argument was mostly against Kapil Siba which was also out of contest.. she was reading too much into the specific words of his speech like NCR is not Delhi but outer areas like Noida, Gurgaon etc.

    I first time saw this guy Deepender Hooda. I think he did very well.
    CommentQuote
  • FDI in Retail: Its impact on the retail & realty sector

    FDI in multi-brand retail will have two fold impact on the Indian real estate sector. Firstly it will increase demand for anchor space in one million plus cities where the state governments agree to permit foreign retailers & secondly there is a possibility that rental expectation would be raised, as not much of quality space would be available, suitable for big-box retail.

    For multi-brand retail, anchor space in upcoming, under construction & project launch stage malls, Indian & existing foreign companies are either in negotiation stage or signed up space at these new upcoming projects, which will put the new entrants in a tight spot, as they will have to look for only new upcoming projects going to be operational only after 3-4 years from now.

    In India, per capita mall space among top 7 metro cities is presently estimated at less than a square feet, with US & Europe average being 20-40 times of India. Steady GDP growth & young population having more disposable income, can attract investment for mall development in India. As compared to developed market, the square footage in our country is very low & there is steady increase in rentals due to shortage of available quality retail space, this could trigger new projects.

    FDI in Retail: Its impact on the retail & realty sector - Moneycontrol.com
    CommentQuote