Fdi in retail sector

India is witnessing strong growth prospects in organized retailing with foreign retail players willing to make investment in the sub continent. India, being the country with the second most-population, has immense scope for retail expansion as along with time, urbanization and consumerism has also been increasing.

Fdi in retail sector

Hence one reason why the government feared the surge of the Foreign Direct Investments in India was the displacement of labour. Hence the issue of displacement of labour consequent to FDI is of primal importance. There are different viewpoints on the impact of FDI in the retail sector in India, According to one viewpoint, the US evidence is empirical proof to the fact that FDI in the retail sector does not lead to any collapse in the existing employment opportunities.

There are divergent views as well.


One of the most striking developments in the last two decades has been in the FDI in the global economic landscape. FDI provides a win-win situation both to the host as well as home country.

The rapid expansion in the FDI by multi-national enterprises since the mid-eighties may be attributed to significant changes in technologies, greater liberalization of trade and investment regime, deregulation and privatization of markets in many countries including developing countries like India.

Initially FDI was not allowed in India in the retail sector because of the fear of the job losses, procurement from international market, competition and loss of entrepreneurial opportunities. FDI in multi brand retailing is prohibited in India. FDI at macro level is a non- debt creating source of additional external finances.

At the micro-level, FDI is expected to boost output, technology, skill levels, employment and linkages with other sectors and region of the host economy.

Entry of one Wall Mart supermarket would displace small retail stores and render people jobless. In India employment has always been a big problem. The rate of unemployment is higher than the rate of employment in India.

Now if in such a situation when employment growth has slowed down, the entry of foreign supermarket would further add up to this problem. British capital came to India during the colonial era of Britain in India.

Fdi in retail sector

However, researchers could not portray the complete history of FDI pouring in India due to lack of abundant and authentic data. Before independence major amount of FDI came from the British companies. British companies setup their units in mining sector and in those sectors that suits their own economic and business interest.

After Independence issues relating to foreign capital, operations of MNCs, gained attention of the policy makers. Keeping in mind the national interests the policy makers designed the FDI policy which aims FDI as a medium for acquiring advanced technology and to mobilize foreign exchange resources.

With time and as per economic and political regimes there have been changes in the FDI policy too. During the s period the government adopted a selective and highly restrictive foreign policy as far as foreign capital, type of FDI and ownerships of foreign companies was concerned.fdi in retail sector The retail industry is that sector of economy which consists of stores, commercial complexes, individual, agencies, companies and organizations.

Etc. involved in the business of selling variety of finished products to the end-user consumers directly and indirectly. According to recent reports, India's economy is showing signs of a significant revival. With several economic advantages coming together at a time. Nov 22,  · fdi in retail sector Stiff competition likely in 10th round of bids for city gas licence India aims to increase the share of natural gas in its primary energy mix to 15% by from the % in Foreign Direct Investment (FDI) in India has been on the rise in the past few years especially in the retail, e-commerce, hospitality, and travel space.

This growth in the retail and e-commerce business has gradually attracted attention from leading international In India, the retail sector is emerging as one of the largest sectors in the.

FDI and its impact on the Retail Sector in India Industry Remember the time when going to cafe coffee day was a luxury and now if you don’t walk into office with a . The Government of India was initially very apprehensive of the introduction of the Foreign Direct Investment in the Retail Sector in India.

The unorganized retail sector as has been mentioned earlier occupies 98% of the retail sector and the rest 2% is contributed by the organized sector.

FDI in Indian Retail Sector