IMPORTANCE OF FDI IN DEVELOPING COUNTRIES Total stock of world FDI increased from 8% - 26%. Global stock of inward FDI increased 22% - 32%. Global stock of outward FDI increased 10% - 17%. China largest gainer of FDI.
FDI IN DIFFERENT COUNTRIES Germany & Europe. South Africa. UAE (United Arab Emirates).
Corporates are increasingly coming into this sector. Demand of branded goods on a large scale. Demand of new and varied products. High quality product is preferred . Varied window display. E-tailers increase the presence.
Worlds largest industries exceeding US$ 9 trillion. Dominated by developed countries. 47 global fortune companies & 25 of Asias top 200 companies are retailers. US, EU & Japan constitute 80% of world retail sales. Retail trade in Europe employs 15% of the European workforce (3 million firms and 13 million workers).
RETAIL SECTOR IN INDIA India 5th Largest retail market Globally. Contributes 14-15% in total GDP. Fastest growing retail market in world. Classified as: 1.Organised Retail Sector. 2.Unorganized Retail Sector.
FDI IN INDIA 1991 - Trade in wholesale & retail. 1997 - Cash & carry wholesale 100% only after Govt. approval. 2006 - Cash & carry under automatic route. - 51% FDI in Single Brand. 2011 - 100% FDI in Single Brand. 2012 - 51% FDI in Multi Brand with Limitations. - 49% FDI in Aviation. - 74% FDI in Broadcasting.
o Incentives attract FDI.o Market size and potential are sufficient inducers.o Tax breaks, import duty exemptions, land and power subsidies, and other enticements.
India ChinaFocus on Services Focus on IndustryHigh labor cost Low Labor CostHome grown Capital FDIOld technology Adaptability to Latest technologyDemocratic Government Communist Government
ADVANTAGES Generates huge employment Increased investment in technology The huge tax revenue generated. The consumer gains from the wide variety of choices and a more diversified basket.
DISADVANTAGES Foreign Players would displace the unorganized retailers because of their superior financial strengths. The entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs. Increase in real estate prices and marginalize domestic entrepreneurs