FDI can open up jobs in retail and aviation

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

FDI will spur more investments, 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, he said.

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, economic slowdown and weak consumer sentiment have hurt most organised retailers of India  that have shut down 5-10% of their non-performing stores.

In aviation, several Indian carriers are 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 organised retail chains. “But now, the organised sector puts forth a requirement for thousands of jobs each year. With the sector opening up, the job spread will subsequently increase.”

The HR official said 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 reinfuse the need for expansion and hiring.”