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Fdi in retail


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Fdi in retail

  2. 2. INTRODUCTION FOREIGN DIRECT INVESTMENT An investment made by a company or entity based in one country, into a company or entity based in another country. It is a cross border investment , where the foreign assets are invested into the organization of the domestic market. FLOW OF FDI REFLECTS:Capital formation Formation of new firms and factories Increase in foreign equity holding in the existing firms. Mergers and acquisitions of existing firms and factories.
  3. 3. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. India has continually sought to attract FDI from the world’s major investors. In 1998 and 1999, the Indian national government announced a number of reforms designed to encourage FDI and present a favorable scenario for investors. After the invasion of FDI as per the new economic policy, 1991, one side it has brought huge investment , infrastructure and thus increase the employment level. But on the other hand it has brought a serious thought to the unorganized retail sector.
  4. 4. FDI IN RETAIL Retailing is one of the worlds largest private industry where the foreign assets are invested into the organization of the domestic market. Liberalization in FDI have brought massive structuring in retail industry along with advance employment , organized stores, availability of quality products at better and cheaper price but on the other hand it has brought fear to the unorganized Indian retail sector. Organized sector includes shopping malls, organized stores etc. Unorganized sector includes peddlers, street vendors and the weekly traders.
  6. 6. REVIEW OF LITERATURE  Foreign investment in the retail sector was restricted under Indian loss till 2011 and does not allow FDI into multi-brand retail. For single-brand retail outlets 51% FDI was allowed. Before 2011 India had prevented innovation and organized competition in its retail industry.  Dr. Manmohan Singh led UPA government allowed foreign groups to own up to 51% multi-brand retailers in India. Single brand retailers such as APPLE and IKEA can own 100% of the Indian stores.
  7. 7.  India’s retail sector employs about 40 million Indians. FDI would be capable exploiting economies in procurement, storage and distribution to out-compete small suppliers. The immediate and direct effect would be a significant loss of employment in the small and unorganized retail trade displaced by the big retail firms.
  8. 8. RESEARCH METHODOLOGY  The study is about to know what affect would be on Indian retail sector with the coming of FDI.  When only 4 percent of the retail trade in India comes under the organized retail it becomes essential to evaluate or assess the viability of FDI taking into consideration not this 4 percent but the 96 percent which belongs to the unorganized retail sector.  Annihilation of small scale and self employed lower middle class will lead to large scale poverty and destitution because the unorganized sector is absorbing the shocks of migration and rural distress. It manages by catering to middle classes in the metropolis. If this market is gone, they will all be unemployed.
  9. 9.  The study will be carried out in local market chowk,civil lines and mahewa (Allahabad).  Data required:I. Why retailers small or big feel insecure with the coming of FDI in retail? II. What threats do they feel? III. How their survival will be threatened? IV. Number of earning hands in their family. V. Do retail store owners’ family members have occupation other than retail store?
  10. 10.  The required data can be found in Indian open market.  At most 10 days, when sample size is taken 50,will be required to collect data.  The sample design adopted will be Simple Random Sampling.  The techniques applied for collecting data will be through personal interview.
  11. 11. People’s view – Should FDI come in retail sector or not Yes  High quality product at low price  Elimination of black marketing  Employment opportunity  Huge range of product  Better infrastructure facility No  Threatens the survival of small retailers  They lower the price to capture the market once it happens it leads to monopoly.  They provide employment opportunity only to educated peoples what about illiterate?  Opening the retail market for foreign entrepreneurs affects domestic entrepreneurs.  Worse impact on agriculture.
  12. 12. Comparison of the survey Retailers ‘views MAHEWA(Sample size=10) CHOWK(sample size=20) CIVIL LINES(sample size=20) AGE YES NO YES NO YES NO 25-35 2 1 2 3 4 2 35-45 1 3 3 5 3 2 45-55 2 1 4 5 2 55-65 1 2 2
  13. 13. CONCLUSION Under the light of above studies made on people’s view 42% people are in favor of opening up the FDI in Indian retail sector whereas 58% people are against this.
  14. 14. Thank You Thank You