FDI in Indian retail market- oppertunities and challenges

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  • 1. FOREIGN DIRECT INVESTMENT IN INDIAN RETAIL MARKET -OPPORTUNITIES AND CHALLENGES BY A. GURU SELVAN N. RAM KUMAR III B.COM THIAGARAJAR COLLEGE
  • 2. INDIAN RETAIL MARKET• Pillar of Indian economy• Accounts for 14 to 15 % of GDP• One of the top five retail markets in the world• 1.2 billion people are engaged in it• Employs about 40 million Indians.
  • 3. FDI SCENARIO IN INDIAN RETAILINGGovernment of India has allowed 100% FDI in single brand retail100% in cash & carry only.Recently FDI in multi brand retail has been allowed at 51%.
  • 4. COMBINATION OF INDIAN RETAIL MARKET 23% 31% Big Retailers Small Retailers Hawkers Push Cart 15% 31% Vendors
  • 5. THE GENERAL IMPACTS OFFDI IN RETAILINGAccelerate retail market growthFarmers will benefitForeign brands will promote healthy competition in marketPush to InfrastructurePush to productivityCustomers feel that retail stores offer better deals
  • 6. Regional players will develop their supply chain strategiesJoint ventures among retailers eases capital flowDevelops the different retail forms and modernizes the sectorLocal entrepreneurs get franchising opportunity for global products.promote India‘s manufacturing and export sectorsGives consumers a better value to goods at a competitive price
  • 7. CHALLENGES OF FDI IN RETAILING• Indian retailers have to consolidate their position.• The import and export balance may be upset• predatory pricing of global retailers may wipe out the domestic retailers• employment in retail sector would be affected.• High cost of borrowings affect the investment of domestic retailers.• global players will give a cut-throat competition for the existing retailers.
  • 8. conclusion• Retailing in India has its own challenges and opportunities• Small incompetent retail businesses within a geographical area will be affected by FDI.• Several small businesses that are competing by attracting more consumer will not be affected by FDI
  • 9. When Indian retailers take these challenges asopportunities, they can beat the global players and even Wal- Mart is no exception to it.