FDI in Retail


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Sushant Reddy MMS 3rd Sem, Dr.V.N.BRIMS,Mumbai

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FDI in Retail

  1. 1. 9/30/2012FDI IN RETAILBy Group 9 1
  2. 2. Agenda• Old FDI Policy• New FDI Policy 9/30/2012• Retail Industry in India• Government’s and Oppositions views• Boon Or Bane?• Limitations of Current setup 2
  3. 3. Presented by• Rohit Sankhe P29 9/30/2012• Sachin Golamwar P31• Sushant Nadarge P41• Jyoti Rajavat P51• Sonal Machale P56 3
  4. 4. FDI Policy In Retail Before• 100% FDI in cash and carry(wholesale) 9/30/2012• 51% FDI In Single Brand allowed in 2006.• No FDI in Multi brand Retail. 4
  5. 5. Entry Options Prior FDI Policy• Franchise Agreement 9/30/2012• Cash And Carry wholesale trading• Strategic Licensing Agreements 5
  6. 6. FDI Policy In Retail Now• 100% FDI in Single Brand retail. 9/30/2012• 51% FDI in Multi brand retail. 6
  7. 7. Retail Industry In IndiaOrganized Retailing30% to 35 % 9/30/2012Eg. Super market Hyper market Department storesInclude domestic and international market 7
  8. 8. Continued….Unorganized Retailing91 % 9/30/2012Eg. KiranaStreet marketHardly Decrease in market share by 1.7 % 8
  9. 9. FDI in Single Brand Retail• In November 2011 government allowed 100% FDI in single brand retail .• conditions :• (a) only single brand products would be sold• (b) products should be sold under the same brand internationally• c) single-brand product retail would only cover products which are branded during manufacturing• (d) any addition to product categories to be sold under “single- brand” would require fresh approval from the government
  10. 10. FDI in Multi Brand Retail • 51% FDI in Multi brand retail. • FDI in multi-brand retail as one of the means for addressing issues relating to high rates of food inflation and low prices realised by Indian farmers. • Following points should be considered:a) Multinational retailer trade practices should not dampen the spirit of Indian farmer.b) Remunerative price to farmer.c) International retailer should be mandated to work with farmer.d) Govt need to identify the trend & ways of supporting farmerse) Govt should ensure that the agro produces should be procured from local buyer.
  11. 11. Government’s view on New Policy• Secure farmer’s remunerative price by eliminating middleman 9/30/2012• Policy of min $100 million• Salutary impact on food inflation• Sourcing of min 30% from MSE is mandatory• Small retailers have flourished with large outlets -CHINA 11
  12. 12. Continued….. 9/30/2012 12
  13. 13. Opposition’s View• Large scale job loss• They will Create monopoly 9/30/2012• Displace existing market• Jobs in manufacture industry will be lost• No role in building roads..etc• Comparison between India & China is misplaced 13
  14. 14. FDI Boon Or Bane?? 9/30/2012• Growth in economy.• Job opportunities.• Benefits to farmer.• Benefits to consumer. 14
  15. 15. Bane??• Impact on Indian Economy. 9/30/2012• Indian retailers loose their business.• Domestic retail will loose market share.• Small business owners and workers will loose their jobs. 15
  16. 16. Limitations of Current Set Up• Infrastructure. 9/30/2012• Intermediaries dominates the value chain.• Improper Public Distribution Channel.• No Global reach. 16
  17. 17. Conclusion• Concerns• Suggestions 9/30/2012• Benefits must reach to every Citizen 17
  18. 18. 9/30/2012THANK YOU!!! 18