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Impact of FDI in Indian Job Market

“Irrespective of the political furor over entry of foreign direct investment (FDI) into the retail and aviation sectors, the impact on the organized job market is likely to be highly positive”, say experts.

FDI will bring more investments,  it will lead to expansion and mergers and acquisitions, and change ownership in retail and aviation. All this will ultimately create more jobs, they said.

Aditya Narayan Mishra, president - staffing, Randstad India, an HR services firm, said “it is not possible to cite a precise figure for the number of jobs that FDI in these sectors will create. But hiring will happen at a faster pace”.

Randstad estimates that the consumer retail sector will add over 54,000 jobs this year, while aviation will give direct and indirect employment to 1.7 million people.

Kumar Rajagopalan, CEO, Retailers Association of India, said “for every 250 sq ft of retail space that is added, one new job is created”. “With FDI, the opportunities will be more,” said Mishra.

In retail, we have seen economic slowdown and because of this weak consumer sentiment have hurt most organized retailers of India that have shut down 5-10% of their non-performing stores.

In aviation, several Indian carriers suffers huge loss and they are still suffering losses due to high taxes on fuel, loans, poor infrastructure, rising airport fees and stiff competition.

Against this background, FDI will help create front-end, shop-level and back-end jobs to shore up supply chains, operations, logistics, said Sunil Goel, director of search firm GlobalHunt India. “In aviation, too, there will be more jobs for roles at the ground level, ticketing, cargo, customer services as well as cabin crew.”

An HR official from a retail chain said “there were apprehensions earlier about organized retail chains. But now, the organized sector puts forth a requirement for thousands of jobs each year. With the sector opening up, the job spread will subsequently increase.”

There were lot of damages due to problems like outlets shutting down, the overall workforce in the retail sector has shrunk 40% this year, compared to the pre-2008 levels when players would open 100-120 outlets per year.

“Currently, expansion is going slow with hardly any new stores coming up. Thus FDI will re infuse the need for expansion and hiring.”

FDI in retail is a kind of boon for the country like India; it will lead to creation of new jobs especially in the bigger cities and our metros. Rather it will help to reduce the malicious intentions of the middlemen of this trade.

Though a lot has been said about good things that FDI in retail will bring but at the same time we have to take into account the grey areas. 

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