In the past, India has had a $450 billion retail market that was untapped by any foreign retailers. However, India has recently opened its doors and invited global supermarket giants to invest in the country’s retail market. Global supermarket chains, such as Wal-mart, Tesco, and Carrefour, have all long-awaited this invitation from India because giant retailers see India as one of the last frontier markets to invest in. With this approval of allowing foreign retailers to enter, investments and the economy may increase in India. Also, foreign retail giants that enter the market will attract capital abroad and that will help reduce inflation that is currently very high in India. Although there are many economic benefits from India’s new policy, there are also downsides as well. Many political opponents of this proposal believe that this decision will cause a disadvantage by causing a large amount of unemployment in India because many small businesses will be thrown out of work. Therefore millions of small domestic retailers in India are also opposed to this decision.
Policemen standing inside first Wal-Mart in India
Although foreign competition may cause some businesses to shut down, I believe that the overall economic benefits gained from this decision will be greater for the country in the long run since it will decrease inflation, increase capital and increase investments for the country.