SlideShare a Scribd company logo

Impact of FDI on retail sector in India

1 of 100
Download to read offline
Impact of FDI on Retail Sector in
India


      Karan Tyagi         11113048
      Kaustubh Kulkarni   11113052
Impact of FDI on Retail Sector in India
What is FDI?
An Introduction
 Foreign direct investment (FDI) is investment directly
 into production in a country by a company located in
 another country, either by buying a company in the
 target country or by expanding operations of an
 existing business in that country. It is cross border
 investment, where foreign assets are invested into
 the organizations of the domestic market excluding
 the investment in stock.


Impact of FDI on Retail Sector in India
What is FDI?

   FDI refers to the net inflows of investment (inflow
   minus outflow) to acquire a lasting management
   interest (10 percent or more of voting stock) in an
   enterprise operating in an economy other than that
   of the investor. It usually involves participation in
   management, joint-venture, transfer of
   technology and expertise.




Impact of FDI on Retail Sector in India
What is FDI?
It brings private funds from overseas into products or
 services. The domestic company in which foreign
 currency is invested is usually being controlled by
 the investing foreign company.
Foreign direct investment (FDI) plays an
 extraordinary and growing role in global business. It
 can provide a firm with new markets and marketing
 channels, cheaper production facilities, access to
 new technology, products, skills and financing.


Impact of FDI on Retail Sector in India
What is FDI?
Why is FDI important for any consideration of going global?

The simple answer is that making a direct foreign investment allows
companies to accomplish several tasks:

 Avoiding foreign government pressure for local production.
 Circumventing trade barriers, hidden and otherwise.
 Making the move from domestic export sales to a locally-based national
  sales office.
 Capability to increase total production capacity.
 Opportunities for co-production, joint ventures with local partners, joint
  marketing arrangements, licensing, etc;



Impact of FDI on Retail Sector in India

Recommended

FMCG Industry Analysis
FMCG Industry AnalysisFMCG Industry Analysis
FMCG Industry AnalysisSubham Jaiswal
 
Internship Report on ITC Ltd. "A Study of various factors leading to purchase...
Internship Report on ITC Ltd. "A Study of various factors leading to purchase...Internship Report on ITC Ltd. "A Study of various factors leading to purchase...
Internship Report on ITC Ltd. "A Study of various factors leading to purchase...Justus George
 
PESTLE Analysis of FMCG retail in India
PESTLE Analysis of FMCG retail in IndiaPESTLE Analysis of FMCG retail in India
PESTLE Analysis of FMCG retail in IndiaMeher Kalyani
 
7 P’S of Marketing of sbi bank
7 P’S of Marketing of sbi bank7 P’S of Marketing of sbi bank
7 P’S of Marketing of sbi bankMohammed Wahid
 
INDUSTRY ANALYSIS OF INDIAN DEFENCE SECTOR - Final
INDUSTRY ANALYSIS OF INDIAN DEFENCE SECTOR - FinalINDUSTRY ANALYSIS OF INDIAN DEFENCE SECTOR - Final
INDUSTRY ANALYSIS OF INDIAN DEFENCE SECTOR - FinalJay Prajapati
 
Indian FMCG Industry Presentation
Indian FMCG Industry PresentationIndian FMCG Industry Presentation
Indian FMCG Industry PresentationJoydeep Singh
 
SIP Report on Customer Acquisition and Retention for Reliance Jio,By Faijan M...
SIP Report on Customer Acquisition and Retention for Reliance Jio,By Faijan M...SIP Report on Customer Acquisition and Retention for Reliance Jio,By Faijan M...
SIP Report on Customer Acquisition and Retention for Reliance Jio,By Faijan M...FaijanMustafa
 

More Related Content

What's hot

Distribution & Channel Management, Promotion Decisions OF ITC Limited
Distribution & Channel Management, Promotion Decisions OF ITC LimitedDistribution & Channel Management, Promotion Decisions OF ITC Limited
Distribution & Channel Management, Promotion Decisions OF ITC LimitedReyaz Jafar
 
Analysis of FMCG industry in India
Analysis of FMCG industry in IndiaAnalysis of FMCG industry in India
Analysis of FMCG industry in IndiaRahil Shaikh
 
Marketing Strategies Of MRF
Marketing Strategies Of MRFMarketing Strategies Of MRF
Marketing Strategies Of MRFRahul Kantak
 
Walmart Flipkart Deal
Walmart Flipkart DealWalmart Flipkart Deal
Walmart Flipkart DealRinkle Kaur
 
Project on-tata-motors
Project on-tata-motorsProject on-tata-motors
Project on-tata-motorsSanchit Jasuja
 
Porter's five forces model for Indian Telecom industry
Porter's five forces model for Indian Telecom industryPorter's five forces model for Indian Telecom industry
Porter's five forces model for Indian Telecom industryHarnoor Singh
 
ITC Rural Marketing
ITC Rural MarketingITC Rural Marketing
ITC Rural MarketingSumati Joshi
 
PROJECT ON RELIANCE RETAIL
PROJECT ON RELIANCE RETAILPROJECT ON RELIANCE RETAIL
PROJECT ON RELIANCE RETAILtarun3288
 
Types of importers 1
Types of importers 1Types of importers 1
Types of importers 1Bibin Xavier
 
4 a's of rural-market
4 a's of rural-market4 a's of rural-market
4 a's of rural-marketNatasha Gupta
 
Marketing SBI SMS unhappy
Marketing  SBI SMS unhappyMarketing  SBI SMS unhappy
Marketing SBI SMS unhappySwapnil Soni
 
MBA marketing (summer internship report)
MBA marketing (summer internship report)MBA marketing (summer internship report)
MBA marketing (summer internship report)MANUJ SINGH
 
India's Foreign trade policy
India's Foreign trade policyIndia's Foreign trade policy
India's Foreign trade policyHarshit Ahuja
 

What's hot (20)

Distribution & Channel Management, Promotion Decisions OF ITC Limited
Distribution & Channel Management, Promotion Decisions OF ITC LimitedDistribution & Channel Management, Promotion Decisions OF ITC Limited
Distribution & Channel Management, Promotion Decisions OF ITC Limited
 
Analysis of FMCG industry in India
Analysis of FMCG industry in IndiaAnalysis of FMCG industry in India
Analysis of FMCG industry in India
 
Marketing Strategies Of MRF
Marketing Strategies Of MRFMarketing Strategies Of MRF
Marketing Strategies Of MRF
 
Product Mix of ITC
Product Mix of ITCProduct Mix of ITC
Product Mix of ITC
 
Walmart Flipkart Deal
Walmart Flipkart DealWalmart Flipkart Deal
Walmart Flipkart Deal
 
“SATISFACTION OF CUSTOMERS TOWARDS D-MART”
“SATISFACTION OF CUSTOMERS TOWARDS D-MART”“SATISFACTION OF CUSTOMERS TOWARDS D-MART”
“SATISFACTION OF CUSTOMERS TOWARDS D-MART”
 
Project on-tata-motors
Project on-tata-motorsProject on-tata-motors
Project on-tata-motors
 
ITC Limited
ITC LimitedITC Limited
ITC Limited
 
Porter's five forces model for Indian Telecom industry
Porter's five forces model for Indian Telecom industryPorter's five forces model for Indian Telecom industry
Porter's five forces model for Indian Telecom industry
 
ITC Rural Marketing
ITC Rural MarketingITC Rural Marketing
ITC Rural Marketing
 
PROJECT ON RELIANCE RETAIL
PROJECT ON RELIANCE RETAILPROJECT ON RELIANCE RETAIL
PROJECT ON RELIANCE RETAIL
 
Types of importers 1
Types of importers 1Types of importers 1
Types of importers 1
 
Tata motors
Tata motorsTata motors
Tata motors
 
Fast moving consumer goods ( FMCG )
Fast moving consumer goods ( FMCG )Fast moving consumer goods ( FMCG )
Fast moving consumer goods ( FMCG )
 
ITC FMCG
ITC FMCGITC FMCG
ITC FMCG
 
4 a's of rural-market
4 a's of rural-market4 a's of rural-market
4 a's of rural-market
 
Marketing SBI SMS unhappy
Marketing  SBI SMS unhappyMarketing  SBI SMS unhappy
Marketing SBI SMS unhappy
 
Godrej Consumer Product- "Cinthol"
Godrej Consumer Product- "Cinthol"Godrej Consumer Product- "Cinthol"
Godrej Consumer Product- "Cinthol"
 
MBA marketing (summer internship report)
MBA marketing (summer internship report)MBA marketing (summer internship report)
MBA marketing (summer internship report)
 
India's Foreign trade policy
India's Foreign trade policyIndia's Foreign trade policy
India's Foreign trade policy
 

Viewers also liked

FDI in Retail sector in India
FDI in Retail sector in IndiaFDI in Retail sector in India
FDI in Retail sector in IndiaPaayal Dharmani
 
FDI in retail sector in India ppt
FDI in retail sector in India pptFDI in retail sector in India ppt
FDI in retail sector in India pptAkash Rana
 
Impact of FDI in Retail Sector
Impact of FDI in Retail SectorImpact of FDI in Retail Sector
Impact of FDI in Retail SectorDeep Das
 
fdi in retail sector in india
fdi in retail sector in indiafdi in retail sector in india
fdi in retail sector in indiasaras90
 
Impact of FDI in Retail Sector in India
Impact of FDI in Retail Sector in IndiaImpact of FDI in Retail Sector in India
Impact of FDI in Retail Sector in IndiaArvind Palanisamy
 
Foreign Direct Investment in India (FDI)
Foreign Direct Investment in India (FDI)Foreign Direct Investment in India (FDI)
Foreign Direct Investment in India (FDI)Ameya Gandhi
 
Foreign Direct Investment In India
Foreign Direct Investment In IndiaForeign Direct Investment In India
Foreign Direct Investment In IndiaApurv Gourav
 
FDI in Retail in India
FDI in Retail in IndiaFDI in Retail in India
FDI in Retail in IndiaRheetam Mitra
 
A project report on analytical study of foreign direct investment in india
A project report on analytical study of foreign direct investment in indiaA project report on analytical study of foreign direct investment in india
A project report on analytical study of foreign direct investment in indiaProjects Kart
 
Fdi in india:An analysis on the impact of fdi in india’s retail sector
Fdi in india:An analysis on the impact of fdi in india’s retail sectorFdi in india:An analysis on the impact of fdi in india’s retail sector
Fdi in india:An analysis on the impact of fdi in india’s retail sectorSubhajit Ray
 
Fdi Presentation
Fdi PresentationFdi Presentation
Fdi Presentationsnehalsoni
 
Foreign Direct Investment and Indian Economy ppt
Foreign Direct Investment and Indian Economy pptForeign Direct Investment and Indian Economy ppt
Foreign Direct Investment and Indian Economy pptDr.houkat1968
 
PPt Of FDI In Retail Sector Of India
PPt Of FDI In Retail Sector Of India PPt Of FDI In Retail Sector Of India
PPt Of FDI In Retail Sector Of India hiteshkrohra
 
Fdi in retail in india
Fdi in retail in india Fdi in retail in india
Fdi in retail in india hiteshkrohra
 
Impact of FDI on Indian Economy
Impact of FDI on Indian EconomyImpact of FDI on Indian Economy
Impact of FDI on Indian EconomyAnkit Agarwal
 

Viewers also liked (20)

FDI in Retail sector in India
FDI in Retail sector in IndiaFDI in Retail sector in India
FDI in Retail sector in India
 
FDI in retail sector in India ppt
FDI in retail sector in India pptFDI in retail sector in India ppt
FDI in retail sector in India ppt
 
Impact of FDI in Retail Sector
Impact of FDI in Retail SectorImpact of FDI in Retail Sector
Impact of FDI in Retail Sector
 
Final fdi in retail ppt
Final fdi in retail  pptFinal fdi in retail  ppt
Final fdi in retail ppt
 
fdi in retail sector in india
fdi in retail sector in indiafdi in retail sector in india
fdi in retail sector in india
 
Impact of FDI in Retail Sector in India
Impact of FDI in Retail Sector in IndiaImpact of FDI in Retail Sector in India
Impact of FDI in Retail Sector in India
 
Fdi ppt
Fdi pptFdi ppt
Fdi ppt
 
Foreign Direct Investment in India (FDI)
Foreign Direct Investment in India (FDI)Foreign Direct Investment in India (FDI)
Foreign Direct Investment in India (FDI)
 
Foreign Direct Investment In India
Foreign Direct Investment In IndiaForeign Direct Investment In India
Foreign Direct Investment In India
 
FDI in Retail in India
FDI in Retail in IndiaFDI in Retail in India
FDI in Retail in India
 
A project report on analytical study of foreign direct investment in india
A project report on analytical study of foreign direct investment in indiaA project report on analytical study of foreign direct investment in india
A project report on analytical study of foreign direct investment in india
 
Fdi in india:An analysis on the impact of fdi in india’s retail sector
Fdi in india:An analysis on the impact of fdi in india’s retail sectorFdi in india:An analysis on the impact of fdi in india’s retail sector
Fdi in india:An analysis on the impact of fdi in india’s retail sector
 
Fdi Presentation
Fdi PresentationFdi Presentation
Fdi Presentation
 
Foreign Direct Investment and Indian Economy ppt
Foreign Direct Investment and Indian Economy pptForeign Direct Investment and Indian Economy ppt
Foreign Direct Investment and Indian Economy ppt
 
PPt Of FDI In Retail Sector Of India
PPt Of FDI In Retail Sector Of India PPt Of FDI In Retail Sector Of India
PPt Of FDI In Retail Sector Of India
 
Retail fdi in india
Retail fdi in indiaRetail fdi in india
Retail fdi in india
 
Fdi in retail in india
Fdi in retail in india Fdi in retail in india
Fdi in retail in india
 
Retail industry ppt
Retail industry pptRetail industry ppt
Retail industry ppt
 
FDI & Economic Growth
FDI & Economic GrowthFDI & Economic Growth
FDI & Economic Growth
 
Impact of FDI on Indian Economy
Impact of FDI on Indian EconomyImpact of FDI on Indian Economy
Impact of FDI on Indian Economy
 

Similar to Impact of FDI on retail sector in India

Role of FDI in Retail Sector
Role of FDI in Retail SectorRole of FDI in Retail Sector
Role of FDI in Retail SectorGagan Dharwal
 
impact of fdi by niranjan
impact of fdi by niranjanimpact of fdi by niranjan
impact of fdi by niranjanNiranjan kumar
 
fdi in indian retail marketing
fdi in indian retail marketingfdi in indian retail marketing
fdi in indian retail marketingNiranjan kumar
 
11.swot analysis for opening of fdi in indian retailing
11.swot analysis for opening of fdi in indian retailing11.swot analysis for opening of fdi in indian retailing
11.swot analysis for opening of fdi in indian retailingAlexander Decker
 
Swot analysis for opening of fdi in indian retailing
Swot analysis for opening of fdi in indian retailingSwot analysis for opening of fdi in indian retailing
Swot analysis for opening of fdi in indian retailingAlexander Decker
 
Retail presentation
Retail presentationRetail presentation
Retail presentationAkash Rana
 
A Study Of FDI On Retail Sector In India
A Study Of FDI On Retail Sector In IndiaA Study Of FDI On Retail Sector In India
A Study Of FDI On Retail Sector In IndiaFinni Rice
 
Retail industry
Retail industryRetail industry
Retail industryArpit Sem
 
Indian Retailing Industry.pptx
Indian Retailing Industry.pptxIndian Retailing Industry.pptx
Indian Retailing Industry.pptxDiksha Vashisht
 
Visual Merchandising w.r.t. Pantaloons Retail India Ltd
Visual Merchandising w.r.t. Pantaloons Retail India LtdVisual Merchandising w.r.t. Pantaloons Retail India Ltd
Visual Merchandising w.r.t. Pantaloons Retail India LtdShrestha Dey
 
Fdiinretail 120413022239-phpapp01
Fdiinretail 120413022239-phpapp01Fdiinretail 120413022239-phpapp01
Fdiinretail 120413022239-phpapp01Milind Sawant
 
146911 633694115995883750 (2)
146911 633694115995883750 (2)146911 633694115995883750 (2)
146911 633694115995883750 (2)tausifurreza
 
Retailing in india
Retailing in indiaRetailing in india
Retailing in indiaMuzahid Khan
 
Foreign direct investment by Rakesh Dawani
Foreign direct investment by Rakesh DawaniForeign direct investment by Rakesh Dawani
Foreign direct investment by Rakesh DawaniRakesh Dawani
 
Retail project
Retail projectRetail project
Retail projectAkash Rana
 
International Journal of Humanities and Social Science Invention (IJHSSI)
International Journal of Humanities and Social Science Invention (IJHSSI)International Journal of Humanities and Social Science Invention (IJHSSI)
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
 

Similar to Impact of FDI on retail sector in India (20)

Fdi in retail
Fdi in retailFdi in retail
Fdi in retail
 
Role of FDI in Retail Sector
Role of FDI in Retail SectorRole of FDI in Retail Sector
Role of FDI in Retail Sector
 
Rupesh
RupeshRupesh
Rupesh
 
impact of fdi by niranjan
impact of fdi by niranjanimpact of fdi by niranjan
impact of fdi by niranjan
 
fdi in indian retail marketing
fdi in indian retail marketingfdi in indian retail marketing
fdi in indian retail marketing
 
11.swot analysis for opening of fdi in indian retailing
11.swot analysis for opening of fdi in indian retailing11.swot analysis for opening of fdi in indian retailing
11.swot analysis for opening of fdi in indian retailing
 
Swot analysis for opening of fdi in indian retailing
Swot analysis for opening of fdi in indian retailingSwot analysis for opening of fdi in indian retailing
Swot analysis for opening of fdi in indian retailing
 
Fdi
FdiFdi
Fdi
 
Retail presentation
Retail presentationRetail presentation
Retail presentation
 
A Study Of FDI On Retail Sector In India
A Study Of FDI On Retail Sector In IndiaA Study Of FDI On Retail Sector In India
A Study Of FDI On Retail Sector In India
 
Retail industry
Retail industryRetail industry
Retail industry
 
Indian Retailing Industry.pptx
Indian Retailing Industry.pptxIndian Retailing Industry.pptx
Indian Retailing Industry.pptx
 
Visual Merchandising w.r.t. Pantaloons Retail India Ltd
Visual Merchandising w.r.t. Pantaloons Retail India LtdVisual Merchandising w.r.t. Pantaloons Retail India Ltd
Visual Merchandising w.r.t. Pantaloons Retail India Ltd
 
Fdiinretail 120413022239-phpapp01
Fdiinretail 120413022239-phpapp01Fdiinretail 120413022239-phpapp01
Fdiinretail 120413022239-phpapp01
 
Fdi in retail
Fdi in retailFdi in retail
Fdi in retail
 
146911 633694115995883750 (2)
146911 633694115995883750 (2)146911 633694115995883750 (2)
146911 633694115995883750 (2)
 
Retailing in india
Retailing in indiaRetailing in india
Retailing in india
 
Foreign direct investment by Rakesh Dawani
Foreign direct investment by Rakesh DawaniForeign direct investment by Rakesh Dawani
Foreign direct investment by Rakesh Dawani
 
Retail project
Retail projectRetail project
Retail project
 
International Journal of Humanities and Social Science Invention (IJHSSI)
International Journal of Humanities and Social Science Invention (IJHSSI)International Journal of Humanities and Social Science Invention (IJHSSI)
International Journal of Humanities and Social Science Invention (IJHSSI)
 

Recently uploaded

A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfDr.M.Geethavani
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptxMaryPotorti1
 
Persuasive Speaking and Means of Persuasion
Persuasive Speaking and Means of PersuasionPersuasive Speaking and Means of Persuasion
Persuasive Speaking and Means of PersuasionCorinne Weisgerber
 
Plant Genetic Resources, Germplasm, gene pool - Copy.pptx
Plant Genetic Resources, Germplasm, gene pool - Copy.pptxPlant Genetic Resources, Germplasm, gene pool - Copy.pptx
Plant Genetic Resources, Germplasm, gene pool - Copy.pptxAKSHAYMAGAR17
 
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...Katherine Villaluna
 
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdfAynouraHamidova
 
skeletal system details with joints and its types
skeletal system details with joints and its typesskeletal system details with joints and its types
skeletal system details with joints and its typesMinaxi patil. CATALLYST
 
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024avesmalik2
 
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfDiploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfSUMIT TIWARI
 
Routes of Drug Administrations PPT..pptx
Routes of Drug Administrations PPT..pptxRoutes of Drug Administrations PPT..pptx
Routes of Drug Administrations PPT..pptxRenuka N Sunagad
 
Chromatography-Gas chromatography-Principle
Chromatography-Gas chromatography-PrincipleChromatography-Gas chromatography-Principle
Chromatography-Gas chromatography-Principleblessipriyanka
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...Nguyen Thanh Tu Collection
 
Odontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxOdontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxMennat Allah Alkaram
 
ICSE English Literature Class X Handwritten Notes
ICSE English Literature Class X Handwritten NotesICSE English Literature Class X Handwritten Notes
ICSE English Literature Class X Handwritten NotesGauri S
 
ACTIVIDAD DE CLASE No 1 sopa de letras.docx
ACTIVIDAD DE CLASE No 1 sopa de letras.docxACTIVIDAD DE CLASE No 1 sopa de letras.docx
ACTIVIDAD DE CLASE No 1 sopa de letras.docxMaria Lucia Céspedes
 
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...MohonDas
 
Practical Research 1: Nature of Inquiry and Research.pptx
Practical Research 1: Nature of Inquiry and Research.pptxPractical Research 1: Nature of Inquiry and Research.pptx
Practical Research 1: Nature of Inquiry and Research.pptxKatherine Villaluna
 

Recently uploaded (20)

Lipids as Biopolymer
Lipids as Biopolymer Lipids as Biopolymer
Lipids as Biopolymer
 
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
 
DNA damage and repair mechanism
DNA damage and repair mechanism DNA damage and repair mechanism
DNA damage and repair mechanism
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx
 
Persuasive Speaking and Means of Persuasion
Persuasive Speaking and Means of PersuasionPersuasive Speaking and Means of Persuasion
Persuasive Speaking and Means of Persuasion
 
Capter 5 Climate of Ethiopia and the Horn GeES 1011.pdf
Capter 5 Climate of Ethiopia and the Horn GeES 1011.pdfCapter 5 Climate of Ethiopia and the Horn GeES 1011.pdf
Capter 5 Climate of Ethiopia and the Horn GeES 1011.pdf
 
Plant Genetic Resources, Germplasm, gene pool - Copy.pptx
Plant Genetic Resources, Germplasm, gene pool - Copy.pptxPlant Genetic Resources, Germplasm, gene pool - Copy.pptx
Plant Genetic Resources, Germplasm, gene pool - Copy.pptx
 
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...
Practical Research 1, Lesson 5: DESIGNING A RESEARCH PROJECT RELATED TO DAILY...
 
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 1-2023-Aynura-Hamidova.pdf
 
skeletal system details with joints and its types
skeletal system details with joints and its typesskeletal system details with joints and its types
skeletal system details with joints and its types
 
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024
VPEC BROUCHER FOR ALL COURSES UPDATED FEB 2024
 
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdfDiploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
Diploma 2nd yr PHARMACOLOGY chapter 5 part 1.pdf
 
Routes of Drug Administrations PPT..pptx
Routes of Drug Administrations PPT..pptxRoutes of Drug Administrations PPT..pptx
Routes of Drug Administrations PPT..pptx
 
Chromatography-Gas chromatography-Principle
Chromatography-Gas chromatography-PrincipleChromatography-Gas chromatography-Principle
Chromatography-Gas chromatography-Principle
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (GLOB...
 
Odontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptxOdontogenesis and its related anomiles.pptx
Odontogenesis and its related anomiles.pptx
 
ICSE English Literature Class X Handwritten Notes
ICSE English Literature Class X Handwritten NotesICSE English Literature Class X Handwritten Notes
ICSE English Literature Class X Handwritten Notes
 
ACTIVIDAD DE CLASE No 1 sopa de letras.docx
ACTIVIDAD DE CLASE No 1 sopa de letras.docxACTIVIDAD DE CLASE No 1 sopa de letras.docx
ACTIVIDAD DE CLASE No 1 sopa de letras.docx
 
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...
BEZA or Bangladesh Economic Zone Authority recruitment exam question solution...
 
Practical Research 1: Nature of Inquiry and Research.pptx
Practical Research 1: Nature of Inquiry and Research.pptxPractical Research 1: Nature of Inquiry and Research.pptx
Practical Research 1: Nature of Inquiry and Research.pptx
 

Impact of FDI on retail sector in India

  • 1. Impact of FDI on Retail Sector in India Karan Tyagi 11113048 Kaustubh Kulkarni 11113052
  • 2. Impact of FDI on Retail Sector in India
  • 3. What is FDI? An Introduction Foreign direct investment (FDI) is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. It is cross border investment, where foreign assets are invested into the organizations of the domestic market excluding the investment in stock. Impact of FDI on Retail Sector in India
  • 4. What is FDI? FDI refers to the net inflows of investment (inflow minus outflow) to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It usually involves participation in management, joint-venture, transfer of technology and expertise. Impact of FDI on Retail Sector in India
  • 5. What is FDI? It brings private funds from overseas into products or services. The domestic company in which foreign currency is invested is usually being controlled by the investing foreign company. Foreign direct investment (FDI) plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and financing. Impact of FDI on Retail Sector in India
  • 6. What is FDI? Why is FDI important for any consideration of going global? The simple answer is that making a direct foreign investment allows companies to accomplish several tasks:  Avoiding foreign government pressure for local production.  Circumventing trade barriers, hidden and otherwise.  Making the move from domestic export sales to a locally-based national sales office.  Capability to increase total production capacity.  Opportunities for co-production, joint ventures with local partners, joint marketing arrangements, licensing, etc; Impact of FDI on Retail Sector in India
  • 7. What is FDI? How is FDI beneficial to the host nation… For a host country or the foreign firm which receives the investment, it can provide a source of new technologies, capital, processes, products, organizational technologies and management skills, and as such can provide a strong impetus to economic development. Impact of FDI on Retail Sector in India
  • 8. Retail Industry An Introduction The Retail Industry is the sector of economy which is consisted of individuals, stores, commercial complexes, agencies, companies, and organizations, etc., involved in the business of selling or merchandizing diverse finished products or goods to the end-user consumers directly and indirectly. Goods and products of the retail industry or sector are the finished final objects/products of all sectors of commerce and economy of a country. Impact of FDI on Retail Sector in India
  • 9. Retail Industry Retail Sector in India: The Retail sector of India is vast, and has huge potential for development, as the majority of its constituents are un-organized. The retail sector of India contributes about 15% to the national GDP, and employs a massive workforce of it, after the agriculture sector. Impact of FDI on Retail Sector in India
  • 10. Retail Industry Retail Sector in India: The retail sector of India handles about $250 billion every year, and is expected by veteran economists to reach to $660 billion by the year 2015. The business in the organized retail sector of India is expected to grow at the rate of 15-20% every year, and can reach the level of $100 billion by the year 2015. Impact of FDI on Retail Sector in India
  • 11. Retail Industry Impact of FDI on Retail Sector in India
  • 12. Division of Retail Industry – Organised and Unorganised Retailing The retail industry is mainly divided into:- Organised Retailing Unorganised Retailing  Organised retailing refers to trading  Unorganised retailing, on the other activities undertaken by licensed hand, refers to the traditional retailers, that is, those who are formats of low-cost retailing, for registered for sales tax, income example, the tax, etc. These include the local kirana shops, owner manned corporate-backed hypermarkets general and retail chains, and also the stores, paan/beedi shops, convenie privately owned large retail nce stores, hand cart and businesses. pavement vendors, etc. Impact of FDI on Retail Sector in India
  • 13. Retail Industry Retail Sector in India: The Indian retail sector is highly fragmented with 97 per cent of its business being run by the unorganized retailers. The organized retail however is at a very nascent stage. The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10 per cent of India‟s GDP. Impact of FDI on Retail Sector in India
  • 14. Major Retailers in India Pantaloon: Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket „Big Bazaar‟. Impact of FDI on Retail Sector in India
  • 15. Major Retailers in India Pantaloon: It has the following retail segments:  Food & Grocery: Big Bazaar, Food Bazaar  Home Solutions: Hometown, Furniture Bazaar, Collection-i  Consumer Electronics: e-zone  Shoes: Shoe Factory  Books, Music & Gifts: Depot  Health & Beauty Care: Star, Sitara  E-tailing: Futurebazaar.com  Entertainment: Bowling Co. Impact of FDI on Retail Sector in India
  • 16. Major Retailers in India Impact of FDI on Retail Sector in India
  • 17. Major Retailers in India Tata Group: Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India „Landmark‟ in 2005. Trent owns over 4 lakh sq. ft retail space across the country. Impact of FDI on Retail Sector in India
  • 18. Major Retailers in India Impact of FDI on Retail Sector in India
  • 19. Major Retailers in India RPG Group: RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and beauty care outlets „Health & Glow‟. Impact of FDI on Retail Sector in India
  • 20. Major Retailers in India Reliance: Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach ` 90,000 crores by 2010. Impact of FDI on Retail Sector in India
  • 21. Major Retailers in India AV Birla Group: AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of retail. It will invest ` 8000-9000 crores by 2010. Impact of FDI on Retail Sector in India
  • 22. Major Retailers in India Impact of FDI on Retail Sector in India
  • 23. Retail formats in India Mom-and-pop stores (Kirana store): They are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. Impact of FDI on Retail Sector in India
  • 24. Retail formats in India Departmental stores: These are general retail merchandisers offering quality products and services. Impact of FDI on Retail Sector in India
  • 25. Retail formats in India Shopping malls: The biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof. Impact of FDI on Retail Sector in India
  • 26. Retail formats in India E-traders: Are retailers providing online buying and selling of products and services. Impact of FDI on Retail Sector in India
  • 27. Retail formats in India Discount stores: These are factory outlets that give discount on the MRP. Impact of FDI on Retail Sector in India
  • 28. Retail formats in India Vending: It is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. Impact of FDI on Retail Sector in India
  • 29. Retail formats in India Category killers: Small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. E.g. Selection Centre Sports, Strand Book Store Impact of FDI on Retail Sector in India
  • 30. Retail formats in India Specialty stores: These are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples. Impact of FDI on Retail Sector in India
  • 31. Differences in single brand retail and multi brand retail: Single Brand Retail: Nike Company opens outlets in Ahmadabad, Bangalore, Delhi and Mumbai selling nothing but Nike Shoes, Nike wrist-watches and Nike t-shirts only.  This is single brand retail.  FDI in Single-Brand Retailing was permitted in 2006, to the extent of 51%.  These were mostly outlets for sportswear, luxury goods, apparel, fashion clothing, jewellery, hand bags, life- style products. Impact of FDI on Retail Sector in India
  • 32. Differences in single brand retail and multi brand retail: Single Brand Retail: But neither the Political parties nor Local Kiranawala raised any voice against this, why? Because these are „high-end‟ luxury items for brand conscious upper middle class and rich class people. It doesn‟t hurt population at large. It was not like people would stop purchasing from local garment store to get Nike or Adidas. Impact of FDI on Retail Sector in India
  • 33. Differences in single brand retail and multi brand retail: Multi Brand Retail:  Big Bazaar opens mall in above cities: selling t-shirts of multiple-brands such as Reebok, Nike, Adidas, Allen Solley, Van Huesen, Peter England etc. +and+ they also sell unbranded t-shirts (you know those buy one get three t-shirts free from unknown companies.)  So this is multi-brand retail: when an outlet sells a product (tshirt, tie, shoes anything) of more than one brand. Impact of FDI on Retail Sector in India
  • 34. FDI in Retailing in India:  Until 2011, Indian central government denied Foreign Direct Investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process. In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. Impact of FDI on Retail Sector in India
  • 35. FDI in Retailing in India: These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Wal-Mart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple. Even single-brand retail was limited to 51% ownership and a bureaucratic process. The statement flickered intense activism, both in opposition and in support of the reforms. Impact of FDI on Retail Sector in India
  • 36. FDI in Retailing in India: In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reached a consensus.The statement flickered intense reactions, both in opposition and in support of the reforms.  In January 2012, India approved reforms for single- brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30% of its goods from India. Impact of FDI on Retail Sector in India
  • 37. FDI in Retailing in India: Recently, a couple of weeks ago, on 14 Sepetember 2012, the Cabinet approved FDI upto 51% in multi- brand retail, along with a slew of economic reforms, subject to many riders. This move has led to the political situation heating upto a boiling point, with TMC having withdrawn support from the government. Impact of FDI on Retail Sector in India
  • 38. FDI in Retailing in India: Impact of FDI on Retail Sector in India
  • 39. Major Players in the International Market: Wal-Mart: Wal-mart is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores. The company is the world's third largest public corporation, according to the Fortune Global 500 list in 2012. It is also the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Impact of FDI on Retail Sector in India
  • 40. Major Players in the International Market: Wal-Mart in India: Bharti Wal-Mart Private Limited is a joint venture between Bharti Enterprises, one of India's leading business groups with interests in telecom, agri-business, insurance and retail, and Wal-Mart, the world‟s leading retailer, renowned for its efficiency and expertise in logistics, supply chain management and sourcing. The joint venture is establishing wholesale cash-and carries stores and back-end supply chain management operations in line with Government of India guidelines. Under the agreement, Bharti and Wal-Mart hold 50:50 stakes in Bharti Wal-Mart Private Limited. Impact of FDI on Retail Sector in India
  • 41. Major Players in the International Market: Impact of FDI on Retail Sector in India
  • 42. Major Players in the International Market: Carrefour: It is an international hypermarket chain headquartered in Boulogne Billancourt, France, in Greater Paris. It is one of the largest hypermarket chains in the world (with 1,395 hypermarkets at the end of 2009, the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco). Impact of FDI on Retail Sector in India
  • 43. Major Players in the International Market: Carrefour in India: The Carrefour Group announces the opening of its first cash & carry store in India in New Delhi under the name "Carrefour Wholesale Cash & Carry.” With a sales area of 5200 m2, this store located east of New Delhi in the Shahadra neighbourhood will offer more than 10.000 SKUs in food and non-food to professional businesses, institutions, restaurants and local retailers. This opening is in line with the group's strategy to be present in major emerging markets that offer significant expansion and medium- and long-term growth opportunities. Impact of FDI on Retail Sector in India
  • 44. Major Players in the International Market: Tesco: It is a British multinational grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues (after Wal-Mart and Carrefour) and the second-largest measured by profits (after Wal-Mart). It has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK, Malaysia, the Republic of Ireland and Thailand. Impact of FDI on Retail Sector in India
  • 45. Major Players in the International Market: Tesco in India: Tesco has had a limited presence in India with a service centre in Bangalore, and outsourcing. In 2008 Tesco announced their intention to invest an initial £60m ($115m) to open a wholesale cash-and- carry business based in Mumbai with the assistance of the Tata Group. Impact of FDI on Retail Sector in India
  • 46. Major Players in the International Market: IKEA: IKEA is a privately held, international home products company that designs and sells ready to- assemble furniture such as beds, chairs, desks, appliances and home accessories. The company is the world's largest furniture retailer. Impact of FDI on Retail Sector in India
  • 47. Major Players in the International Market: IKEA in India: Swedish furniture home accessories IKEA is planning to enter India with a Euros 1.5 billion investment in a single-brand retail venture. In the first phase it plans to set up 25 stores with an investment of Euros 600 million (around Rs 4,200 crores) in opening 25 stores. The company has already sought government permission to set up a 100% Indian venture and has also promised to increase its sourcing from the country. Impact of FDI on Retail Sector in India
  • 48. Major Players in the International Market: IKEA: Impact of FDI on Retail Sector in India
  • 49. Government Policies: Background: India has liberalized its retail industry to permit foreign investment, with regulatory issues and legal structures pertinent to establish operations in this new dynamic market. Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. Impact of FDI on Retail Sector in India
  • 50. Government Policies: Background: As part of the economic liberalization process set in place by the Industrial Policy of 1991, the Indian government has opened the retail sector to FDI slowly through a series of steps. Impact of FDI on Retail Sector in India
  • 51. Government Policies: Background:  1995 – World Trade Organization‟s general agreement on trade in services, which include both wholesale and retailing services, came into effect  1997 – FDI in cash and carry (wholesale) with 100% rights allowed under the government approval route  2006 – FDI in cash and carry (wholesale) brought under the automatic route  Up-to 51% investment in a single- brand retail outlet permitted Impact of FDI on Retail Sector in India
  • 52. Government Policies: Background:  2011 – 100% FDI in single –brand retail permitted  2012, Sep – 51% FDI in multi- brand retail permitted Impact of FDI on Retail Sector in India
  • 53. Government Policies: Background: The Indian government removed the 51% cap on FDI into single-brand retail outlets in December 2011, and opened the market fully to foreign investors by permitting 100% foreign investment in this area. It also made drastic progress in allowing multi-brand retailing, which had so far had been prohibited in India. Impact of FDI on Retail Sector in India
  • 54. Government Policies: Background:  After months of policy paralysis, Manmohan Singh‟s government roared back to life on Friday, 14th of September by unleashing a blitz of reforms. It also made drastic progress in allowing multi-brand retailing, which had so far had been prohibited in India.  The existence of large supermarket brands displacing traditional Indian mom-and-pop stores is a hot political issue in India, and the current move to allow 51% FDI in multi brand retail industry will remain a burning issue for some time yet to come. Impact of FDI on Retail Sector in India
  • 55. Political Developments:  The Government declared its intention to allow FDI in multi brand retail upto 51% in November 2011.  This move led to large scale protests from political parties in the opposition. The UPA and the NDA were divided on the issue, with differences of opinion about the benefits and disadvantages of FDI in multi brand retail to different sectors of the Indian economy.  The BJP threatened to file an adjournment motion in Parliament if the bill was passed without political consensus. Impact of FDI on Retail Sector in India
  • 56. Political Developments:  BJP alleged the decision to allow 51 per cent FDI in multi- brand retail was taken under pressure from the US, UK and France and challenged the government to face the adjournment motion if it was confident of majority support.  The TMC, in spite of being a part of the UPA, vehemently opposed the move. There were a variety of opinions from the myriad political parties in the melting pot of India‟s diverse political spectrum.  After months of policy paralysis, Manmohan Singh‟s government roared back to life on Friday, 14th September, by unleashing a blitz of reforms. Impact of FDI on Retail Sector in India
  • 57. Political Developments:  In less than 24 hours, the government announced more measures to liberalize the economy than in the past eight years.  The government made a decision to allow foreign direct investment from abroad of up to 51 percent in multi-brand supermarkets, up to 49 percent in aviation, up to 71 percent in broadcasting and up to 49 percent in parts of the power industry.  Singh has cleverly sidestepped opposition parties and waspish allies this time by leaving it to individual states to decide whether to allow the supermarkets on their patch. Impact of FDI on Retail Sector in India
  • 58. Political Developments:  The government appears to be gambling that its political fortunes in the 2014 national elections are best served by being bold. India‟s benchmark BSE index rose 2.46 percent to 18,464.27 points on Friday, its highest close since 26 July, 2011.  The Cabinet‟s decision to approve FDI in multi brand retail has led to a total disruption of Parliament, with the Opposition forcing constant adjournments over the issue.  However, the TMC has been a constant thorn in UPA‟s side and it has withdrawn support to the Government and the six Cabinet Ministers of the TMC have submitted their resignations to the Prime Minister. Impact of FDI on Retail Sector in India
  • 59. Political Developments:  For now though, the Government is safe because the SP and the BSP have pledged outside support to the UPA, in spite of their opposition to the Government‟s recent moves.  The BJP has also made its stand clear, declaring that it does not intend to file a no-confidence motion. Impact of FDI on Retail Sector in India
  • 60. Political Developments: Impact of FDI on Retail Sector in India
  • 61. FDI proposal in its current form:  The Cabinet has approved the proposal of the Department of Industrial Policy & Promotion for permitting FDI in multi-brand retail trading, subject to specified conditions.  The proposal had earlier been approved by the Cabinet in its meeting on 24.11.2012. However, implementation of the proposal had been deferred, for evolving a broader consensus on the subject.  The Chief Ministers of Delhi, Assam, Maharashtra, Andhra Pradesh, Rajasthan, Uttarakhand, Haryana and Governments of the State of Manipur and the Union Territory of Daman & Diu and Dadra and Nagar Haveli, have expressed support for the policy in writing. Impact of FDI on Retail Sector in India
  • 62. FDI proposal in its current form:  The Chief Minister of Jammu & Kashmir, through his press statements, has publicly endorsed the policy and asked for its implementation.  The State Governments of Bihar, Karnataka, Kerala, Madhya Pradesh, Tripura and Odisha have expressed reservations.  During the consultations with the stakeholders, views for and against FDI in multi-brand retail trading were expressed.  On balance, however, the discussions generally indicated support for the policy, subject to the introduction of adequate safeguards. Impact of FDI on Retail Sector in India
  • 63. FDI proposal in its current form: Accordingly, the following proposals have been approved: (i) Retail sales outlets may be set up in those States which have agreed or agree in future to allow FDI in MBRT under this policy. The establishment of the retail sales outlets will be in compliance of applicable State laws/ regulations, such as the Shops and Establishments Act etc. Impact of FDI on Retail Sector in India
  • 64. FDI proposal in its current form: (ii) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census. The outlets may only be setup in areas which have been approved by the Municipal Corporations of the concerned cities, subject to various conditions. On the other hand, States/ Union Terrritories, which do not have any city with a population exceeding 10 lakhs, but are desirous of implementing the policy, would have the flexibility to do so. Impact of FDI on Retail Sector in India
  • 65. FDI proposal in its current form:  (iii) A three year timeframe has been fixed for setting up the back-end infrastructure, which includes capital expenditure on all activities, excluding that on front-end units; for instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, ware-house, agriculture market produce infrastructure etc. Expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure. This condition will bind the foreign investors to invest in critical back-end infrastructure, which is a felt need across the country. It would also make the foreign investors accountable for proper implementation of the condition. Impact of FDI on Retail Sector in India
  • 66. FDI proposal in its current form: (iv) A high-level group under the Minister of Consumer Affairs may be constituted to examine various issues concerning internal trade and make recommendations for internal trade reforms. Impact of FDI on Retail Sector in India
  • 67. Impact of FDI on Retail Sector in India
  • 68. Impact of FDI : Different points of view Government Argument  Huge investments in the retail sector will see gainful employment opportunities in agro- processing, sorting, marketing, logistics management and front-end retail. Impact of FDI on Retail Sector in India
  • 69. Impact of FDI : Different points of view Government Argument At least 10 million jobs will be created in the next three years in the retail sector. Impact of FDI on Retail Sector in India
  • 70. Impact of FDI : Different points of view Government Argument FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen. Impact of FDI on Retail Sector in India
  • 71. Impact of FDI : Different points of view Government Argument Foreign retail majors will ensure effective supply-chain efficiencies. That will also create an opportunity for the local players in retail to learn from them. Impact of FDI on Retail Sector in India
  • 72. Impact of FDI : Different points of view Government Argument Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, s orting and processing. This is expected to considerably reduce post-harvest losses. Impact of FDI on Retail Sector in India
  • 73. Impact of FDI : Different points of view Government Argument This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted. Impact of FDI on Retail Sector in India
  • 74. Impact of FDI : Different points of view Government Argument  Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation. Impact of FDI on Retail Sector in India
  • 75. Impact of FDI : Different points of view Government Argument A strong legal framework in the form of the Competition Commission is available to deal with any anti-competitive practices, including predatory pricing. Impact of FDI on Retail Sector in India
  • 76. Impact of FDI : Different points of view Government Argument There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail. Thailand has experienced tremendous growth in the agro-processing industry. Impact of FDI on Retail Sector in India
  • 77. Impact of FDI : Different points of view Government Argument In Indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers. Impact of FDI on Retail Sector in India
  • 78. Impact of FDI : Different points of view Government Argument In any case, organized retail through Indian corporates is permissible. Experience of the last decade shows small retailers have flourished in harmony with large outlets. Impact of FDI on Retail Sector in India
  • 79. Impact of FDI : Different points of view Government Argument Benefit to farmers:  7-10% higher price to farmers than what they get from Mandi  3-4% incentive for the quality of the produce farmers deliver to Bharti Wal-Mart based on customer requirement  Expert advice on better crop planning and management  Efficient crop calendar management aimed at catching early and late seasons for better prices  Opportunity to maximize and improve income by offering better quality Impact of FDI on Retail Sector in India
  • 80. Impact of FDI : Different points of view Government Argument Benefit to stores & customers:  Fresh produce  Local source  Consistent quality  Safer food  Value for money  Lower cost compared to open market buys Impact of FDI on Retail Sector in India
  • 81. “The language that the BJP has employed to threaten foreign investors is condemnable, very regrettable and tantamount to verbal lumpenism. To say that governments will change in states after recent elections and new government may cancel decisions taken by the Centre on FDI is against the spirit of democratic polity....this indicates their dictatorial mindset of my way or highway” Manmohan Singh, Prime Minister of India
  • 82. “There was a time when even the entry of computers was resisted in the belief that it would lead to a loss of jobs. If FDI can unleash the true potential of agricultural value chain, we must welcome it. As far as the kirana store is concerned, let us not underestimate Indian ingenuity. Wal-mart can co-exist with the small shop, each adding to customer choice.” Rajan Mittal, MD, Bharti Enterprises
  • 83. Impact of FDI : Different points of view Opposition‘s Argument  Move will lead to large-scale job losses. International experience shows supermarkets invariably displace small retailers. Small retail has virtually been wiped out in developed countries like the US and in Europe. South East Asian countries had to impose stringent zoning and licensing regulations to restrict growth of supermarkets after small retailers were getting displaced. India has the highest shopping density in the world with 11 shops per 1,000 people. It has 1.2 crore shops employing over 4 crore people; 95% of these are small shops run by self-employed people Impact of FDI on Retail Sector in India
  • 84. Impact of FDI : Different points of view Opposition‘s Argument Global retail giants will resort to predatory pricing to create monopoly/oligopoly. This can result in essentials, including food supplies, being controlled entirely by foreign organizations, resulting in elimination of local stores. Impact of FDI on Retail Sector in India
  • 85. Impact of FDI : Different points of view Opposition‘s Argument Fragmented markets give larger options to consumers. Consolidated markets make the consumer captive. Allowing foreign players with deep pockets leads to consolidation. International retail does not create additional markets, it merely displaces existing markets. Impact of FDI on Retail Sector in India
  • 86. Impact of FDI : Different points of view Opposition‘s Argument Jobs in the manufacturing sector will be lost because structured international retail makes purchases internationally and not from domestic sources. This has been the experience of most countries which have allowed FDI in retail. Impact of FDI on Retail Sector in India
  • 87. Impact of FDI : Different points of view Opposition‘s Argument Argument that only foreign players can create the supply chain for farm produce is bogus. International retail players have no role in building roads or generating power. They are only required to create storage facilities and cold chains. This could be done by governments in India. Impact of FDI on Retail Sector in India
  • 88. Impact of FDI : Different points of view Opposition‘s Argument Comparison between India and China is misplaced. China is predominantly a manufacturing economy. It's the largest supplier to Wal-Mart and other international majors. It obviously cannot say no to these chains opening stores in China when it is a global supplier to them. India in contrast will lose both manufacturing and services jobs. Impact of FDI on Retail Sector in India
  • 89. “FDI in multi-brand retail was taken under pressure from countries like America, whose economic interests stand inversely proportioned to that of small traders and farmers.” Laxmikant Vajpayee, BJP State Chief
  • 90. “Our party's position is clear. We are opposed to FDI in retail sector. The Government says it will allow FDI in branded goods. But it is a loose term as anything can be branded. We want the Government to specify the items where FDI is allowed.” Sitaram Yechury, CPI-M
  • 91. Impact of FDI : Different points of view Impact of FDI on Retail Sector in India
  • 92. Our View: In principle, governments should not prevent anybody, Indian or foreign, from setting up any business unless there are very good reasons to do so. Hence, unless it can be shown that FDI in retail will do more harm than good for the economy, it should be allowed. Impact of FDI on Retail Sector in India
  • 93. Our View: A major argument given by opponents of FDI in retail is that there will be major job losses. Frankly, the jury is out on whether this is the case or not, with different studies claiming different findings. Big retail chains are actually going to hire a lot of people. So, in the short run, there will be a spurt in jobs. Eventually, there's likely to be a redistribution of jobs with some drying up (like that of middlemen) and some new ones sprouting up. Impact of FDI on Retail Sector in India
  • 94. Our View: Fears of small shopkeepers getting displaced are vastly exaggerated. When domestic majors were allowed to invest in retail, both supermarket chains and neighbourhood pop-and-mom stores coexisted. It's not going to be any different when FDI in retail is allowed. Who, after all, will give home delivery? The local kirana. Why would anyone shun them? Impact of FDI on Retail Sector in India
  • 95. Our View: If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices. Mega retail chains need to keep price points low and attractive - that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn. Impact of FDI on Retail Sector in India
  • 96. Our View: If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices. Mega retail chains need to keep price points low and attractive - that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn. Impact of FDI on Retail Sector in India
  • 97. Our View:  The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak. To begin with, it's very unlikely that global retail will ever become monopolies. Stores like Wal-Mart or Tesco are by definition few, on the outskirts of cities (to keep real estate costs low), and can't intrude into the territory of local kiranas. So, how will they gobble up the local guy? Secondly, it can't be anyone's case that farmers are getting a good deal right now. The fact is that farmers barely subsist while middlemen take the cream. Impact of FDI on Retail Sector in India
  • 98. Bibliography: Print Media:  1. The Times Of India  2. The Hindu Electronic Media:  1. NDTV 24X7  2. Times Now  3. Headlines Today  4. CNN IBN Impact of FDI on Retail Sector in India
  • 100. THANK YOU !! Thank you all for having had the patience to sit through an hour of this monotonous drone, but all we can say is, we are only repaying the favour in kind. Impact of FDI on Retail Sector in India