FDI IN MULTI-BRAND RETAIL
20, Jun 2019
Prelims level : Economics Mains level : GS III- Investment Models
Why in News:
- Commerce Minister reiterated that the central government will not allow foreign direct investment in multi-brand retail, and also assured small traders predatory pricing by multinationals would not be allowed.
- On the pretext of B2B, no entry will be allowed for multi-brand retail.
- Predatory pricing will not be allowed and necessary action will be taken against defaulters.
- Representatives of the associations of kirana stores had raised the issues of the need for a level playing-field and the adverse impact of anti-competitive practices such as predatory prices by foreign companies.
- Commerce minister urged small retailers to make use of modern technology and avail benefits of Government of India schemes like MUDRA to improve their business, spruce up their shops, improve stocks by storing high quality products and pass on the benefits to people employed by them
- The Confederation of All India Traders (CAIT) submitted a memorandum demanding that the same restrictions and conditions imposed on global e-commerce players be made applicable to domestic e-commerce companies also.
Multi -Brand Retail:
- Multi-brand retail is a concept when a store or a portal or any other form of outlet sells more than one brand.
- Predatory pricing, also known as undercutting, is a pricing strategy in which a product or service is set at a very low price with the intention to achieve new customers, or driving competitors out of the market or to create barriers to entry for potential new competitors.
- Pradhan Mantri Mudra Yojana (PMMY)is a flagship scheme of Government of India to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them. It enables a small borrower to borrow from all Public Sector Banks or loans upto Rs 10 lakhs for non-farm income generating activities.