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Due to this rather unfair non-competitive market, it is difficult to ensure that farmers would get market-determined prices. The issue here that there is a monopoly power of the wholesale buyers (transporters) who have the strong political support. This can be seen in the monopoly of those who have trucks and purchases in the major mandis. It is almost impossible for anyone to penetrate this lobby.

Argument 3: FDI in multi-brand retail will lead to loss of jobs in kirana stores. Surprisingly the argument focuses on multi brand retail mainly in terms of agricultural commodities. This is misleading as the largest sales are in non-agricultural goods. Even then this argument against FDI in multi-brand retail is flawed.

Organized retail accounts only for 5 percent of the total retail sales. Also the shift to organized retail normally occurs as a response to the increase in labor costs.

Today, even in large Indian metros, it is the kirana stores that provide services such as home delivery and free credit. This is not easily matched by the organized retail which goes against any organized retail.

The retail industry is mainly driven by the demand side (consumers) of the market. In such a situation the consumers are intelligent enough not to suddenly undertake a costly and time-consuming retail purchases simply because foreign investors are here.

Widespread organized retail is not easily supported by the Income levels in India. Generally the empirical studies have showed that the main arguments favoring FDI inflow were mainly in the field of technology. That is where the access to technology is not easily available. This usually comes via spillover benefits to local firms. This further provides strong competition to the local companies. This would be mainly in the area of supply chain management where the foreigners have a superior edge over India.

(Manoj Pant: Faculty at Jawaharlal Nehru University in New Delhi.) August 17, 2012 - INDIA-WEST Economic limes)

The FDI in retail trade would eliminate middle man thus benefitting the consumers with the competitive price. It is also expected that the farmers will get better price for their agricultural products. The retail chains would enhance the integrated infrastructure like transport, warehouses, logistics and support services that would indirectly expand the agricultural base which in turn will help the regional food processing industry. The supply chains will ultimately strengthen the local economy and the rural Indian community would also be benefited. Yadav, H. S Jauhari, Sangeeta 2012

The significant flow of FDI would look at the channels/supply chain side for potential consideration of the role of third-party logistics intermediaries in multichannel retailing, the strategies that optimize reverse logistics profitably, the behavioral frameworks in the channels of distribution, the merchandise pricing and promotion across the channels and the concerns about the environment and recycling Grewal, D., & Levy, M. (2007).

Supply chain intelligence and solutions will help in anticipating customer demand and thus derive financial insights across the extended supply chains. This would improve product quality, yield and speed and time to market thus optimizing the supply strategies and influencing IT investments through FDI.