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Fdi in Retail Sector in India

The document discusses foreign direct investment (FDI) in the retail sector in India. It defines retail, FDI, and organized and unorganized retail. It notes that organized retail makes up only 2% of the Indian market. The document outlines the current status of FDI in India allowing 100% in cash-and-carry wholesale and 51% in single-brand retail. It discusses the advantages and disadvantages of FDI in retail and current major investments like Bharti-Walmart. Finally, it proposes allowing up to 49% FDI investment initially restricted to large cities to protect small retailers.

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363 views12 pages

Fdi in Retail Sector in India

The document discusses foreign direct investment (FDI) in the retail sector in India. It defines retail, FDI, and organized and unorganized retail. It notes that organized retail makes up only 2% of the Indian market. The document outlines the current status of FDI in India allowing 100% in cash-and-carry wholesale and 51% in single-brand retail. It discusses the advantages and disadvantages of FDI in retail and current major investments like Bharti-Walmart. Finally, it proposes allowing up to 49% FDI investment initially restricted to large cities to protect small retailers.

Uploaded by

Mi Nk
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Presented by: Shantanu Ghotgalkar

What is Retail
Retail is stocking the producers goods and involves the act of selling it to the individual consumer, at a margin of profit.

What is FDI
The simplest explanation of FDI would be a direct investment by a corporation in a commercial venture in another country. Business enterprise operates completely outside the economy of the corporations home country. The investing corporation must control 10 percent or more of the voting power of the new venture.

Retail sector in India


Retail sector is divided into two parts Organised retail (2%) Unorganised retail(98%) Organised- Having more than 10 employees, licensed retailers, Unorganised retail- traditional retail shops like kirana stores, pani-bidi, general stores, etc

Indian retail sector


India is ranked at the second place in global foreign direct investments in 2010 Retail sector contributes near 14% to the GDP Organised retail is expected to grow from Rs 32,400 crore in 2010 to Rs54,700 crore in 2012. Unorganised market is valued at Rs 2,00,000 by year 2012

Current FDI status in india


100% FDI in cash and carry wholesale trading 51% in single brand retail only No FDI in multi brand retail

Cash & Carry wholesale retailing


Cash & Carry Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption.2.24.1.1)

Single brand Retailing


51% FDI is permitted under government route. No definition of single brand has been given. Certain conditions have been specified: a) Products to be sold should be of a Single Brand only. b) Products should be sold under the same brand in one or more countries other than India.

c) Single Brand product-retailing would cover only products which are branded during manufacturing.

Advantages of FDI in Retail


Increase in the standard of living of people Control over food inflation Better facilities in logistics and warehouse Breaking the long channels of distribution Quality products at affordable prices Better Supply chain management would be ensured

Disadvantages
A big threat to the large traditional retailers like kirana walas, hawkers, etc Creation of large amount of unemployment Rural people would be ruled out of development A fear of creating monopoly in long-run period

Current FDI investments in retail


Rs 35,000 crore by Bharti-Walmart a joint venture

Current proposed plans of FDI investment in Retail in India


Allow a max of 49% investment A major chunk of investment should be spend on back end infrastructure like cold storages, warehouses, overall logistics , etc Initial investment resticted only in major metropolitan cities of population above 1 million in order to save small retailers

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