The document discusses foreign direct investment (FDI) in India, particularly in the retail sector. It provides an overview of India's retail sector, including its large size but predominantly unorganized nature. It also outlines India's FDI policy over time, which increasingly liberalized to allow more foreign investment. While FDI can benefit the economy through job creation and technology transfers, the retail sector faces challenges in competing with small shops and adapting to India's conditions. Overall, the document analyzes opportunities and challenges of FDI in India's large but unorganized retail industry.

1. Presented By:-
Manpreet Singh

3. •FDI in Retail – Policy Perspectives
•Retail Sector – An Overview
•FDI Policy in Retail - Opportunities & Challenges
•Conclusion
Issues for Discussion

4. Investment done by citizens and
government of one country (home
country) invest in industries of
another country (host country).
Foreign
Investment
through
Foreign
Direct
Investments
Foreign
Institutional
Investors

5. Automatic Route Government
No permission required Approval /License required.

6. • 1991- FDI allowed selectively up to 51% in priority
sectors
• 1997-FDI allowed up to 100% in sectors like
mining, manufacturing

7. • 2000-06 FDI allowed up to 100% in specified sectors
FDI limits increased
Procedures further simplified
• The top 3 Indian Regions attracting the highest FDI
 Mumbai, Delhi and Karnataka
 Account for nearly 62% of the total FDI

8. Barter
system
Weekly
market
Village
melas
Kirana
Stores
Government
Stores
Super
markets
Hyper
markets
Malls
Brand
outlets

9. Incentives attract FDI
Market size and potential are sufficient inducers
 Tax breaks, import duty exemptions, land and power
subsidies etc

10. FDI inflows from
August 1991 to
April2010 were Rs.
6750 billion
FDI inflows from
2000-10 crossed Rs.
15000 billion

12. • Size : 400 billion Rs.
• Growth Rate : 13%
• GDP contribution : 12%
• Major sector : Food and Grocery
• Employment : 2nd largest industry
(35.06 million)
Types: Organized ( 5%)
Unorganized ( 95%)
Current Dollar Rate (52.64 rs)
Money Control

13. 20%
8%
14%
6%
12%
USA
China
Japan
Brazil
India
Contribution Respective
to GDP

14. US
Sales: Rs.
18750 bn
Earnings:
Rs. 650 bn
Stores:
6,800
worldwide
France
Sales: Rs.
6500 bn
Earnings:
Rs. 300 bn
Stores:
87,422
worldwide
UK
Sales: Rs.
5150 bn
Earnings:
Rs. 303 bn
Stores:
3,729
worldwide
Germany
Sales: Rs.
5100 bn
Earnings:
Rs. 100 bn
Stores:
2,221
worldwide
US
Sales: Rs.
3900 bn
Earnings:
Rs. 250 bn
Stores:
2,258
worldwide

16. •A large emerging market
Increase in income of a family
Consumer spending power increased by 75% in
last 3 years
The per capita income in 2009–2010 has more
than doubled to Rs. 35400 from Rs. 18096 in
2000–01
INDIA

17. •Employment generation.
Second-largest employer after
agriculture
Retail trade employing 35.06 million
Wholesale trade generating an
additional employment of 5.48 millions
Additional
1.6 mn
jobs .

18. •Technology Better use of resources and
goods
Wastage and Storage problems will be
resolved
Efficient logistics, production, and
distribution channels
Digital records

20. •Rural market's
60% Indian households
2/5 of the country’s total consumption pie
Accounts to 45% of GDP

22. • Major challenge faced by Organized retail sector:
In Retail, over 70 per cent of the labor force in both
sectors combined (organized and unorganized) is
either illiterate or educated below the primary level
• CSR September,2012

23. • A strong competition from mom and pop shops:-
Easily accessible & approachable
Provide services like Free home delivery and goods on
credit
They change consumer focus

24. INDIAN
• Pantaloons
• Reliance
• Bharti retail
• RPG
• Lifestyle
• K raheja
• Subhiksha
• Piramyd
• Trent
• Vishal group GLOBAL
• Tesco
• Walmart
• Metro
• Carrefour
• B&Q
• Target

25. • Market power is in hands of unorganized retail
•95%Unorganized
•5%Organized

26. India is still in developing stage in installing and
managing an effective IT system especially in rural areas
which hampers the overall growth of organized retail
sector.

27. Banks are reluctant to finance retailers because of falling
demand of organized retailers in India as it has witnessed
failure of many stores like Spencer's, Subhiksha etc.

28. • Taxation laws in India favors only small retail businesses
• Implementation of non-uniform VAT across states
• Octroi and entry tax in some states

29.  The increased flow of FDI in a country has given a major boost
to the country's economy
 FDI has provided better access to technologies for the local
economy
 Multinational firms have increased the degree of competition
in host-country markets which will force existing inefficient
firms to invest more in physical or human capital

30.  India, with its skilled labor and manpower has the
potential to overtake China as the most preferred
destination for Foreign Investments.
 Hence measures must be taken in order to ensure that the
flow of FDI in our country continues to grow.

31. Thank You