This document discusses FDI in single brand and multi brand retail in India. It outlines the government policies that allow up to 100% FDI in single brand retail and 51% in multi brand retail, with requirements to source 30% of goods from India. The causes and effects of retail FDI are examined, including benefits like organized retail and tax revenue, as well as potential problems like competition with small retailers. Typical cases like IKEA and Bharti Walmart attempting to enter the Indian market are described.

1. FDI in single brand and
multi brand retail : By C4
:
FDI in single brand and multi brand retail : C4 group BNA PPT

2. Indira Institute Of Management Pune
FDI in single brand and multi brand retail
 Content
1 Government policies
2 Causes and Effects
3 Typical cases
4 References
FDI in single brand and multi brand retail : C4 group BNA PPT

3. Indira Institute Of Management Pune
Government policies
 Details
1. Single-brand with 100% ownership
• Requirement that the single brand retailer source 30 percent of its goods
from India.
2. Multi-brand retail 51% FDI
• Requirement brand retailer source 30 percent of its goods from India.
• Needs approval from respective state govt.
• Allowed only in cities where population is more than 10 lac.
FDI in single brand and multi brand retail : C4 group BNA PPT

4. Indira Institute Of Management Pune
Causes and Effects
 Details
Causes
1. Retailing in India accounts for 14 to 15 percent of its GDP.
2. The Indian retail market is estimated to be US$ 450 billion
3. One of the top five retail markets in the world by economic value
4. Supermarkets accounted for about 4 percent of the industry
FDI in single brand and multi brand retail : C4 group BNA PPT

5. Indira Institute Of Management Pune
causes and effects
 Effects
 Benefit to government : organized retail
1. Organized retailing, refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, etc.
2. These include
1 the publicly traded supermarkets,
2 corporate-backed hypermarkets
3 retail chains,
4 and also the privately owned large retail businesses
3 It increases revenue of Government
FDI in single brand and multi brand retail : C4 group BNA PPT

6. Indira Institute Of Management Pune
causes and effects
 Effects
4 Better logistics, competitive shops, foreign expertise and technology.
5 Help to bring down food prices
6 Higher prices for farmers, and lower prices for consumers.
7 Can be adverse for small retailers , mom and pop shop owners .
8 70% material can be sourced from outside so it can cause the competition for
Indian companies .
FDI in single brand and multi brand retail : C4 group BNA PPT

7. Indira Institute Of Management Pune
Typical cases
 IKEA
Offer wide range of product s at cheaper price
Product includes but not limited to
1. furniture
2. Children's items: mammals, birds, adjectives
3. Curtain accessories:
4. Kitchen utensils:
5. wall decoration, pictures and frames, clocks
6. food products
plans to invest 1.5 billion euro (Rs 10,500 crore) in India to set up 25 stores.
FDI in single brand and multi brand retail : C4 group BNA PPT

8. Indira Institute Of Management Pune
Typical cases
Problems faced by IKEA
1. 30% sourcing from India
2. Allowed Product range
Diluted sourcing norms
From sourcing of 30 per cent of requirements “mandatorily” from micro, small
and medium enterprises (MSMEs) in India, to “preferable sourcing from
MSMEs”.
FDI in single brand and multi brand retail : C4 group BNA PPT

9. Indira Institute Of Management Pune
Typical cases
Bharti Walmart
Cashing on FDI loop holes
1. Bharti Walmart, earned more than half its revenues in 2011 by selling
merchandise to Bharti Retail.
2. Bharti Retail, purchased goods worth Rs 1,095 crore from Bharti Walmart.
3. This amounts to 58% of the joint venture company's total revenue of Rs 1,876
crore for the year.
4. Department of Industrial Policy & Promotion had in 2010 barred these
companies from selling more than 25% of their products to 'group companies'.
Deface from BhartiWalmart
No clear definition of group companies by Indian Government.
Other issues , Lobbying money and sacking of Indian CEO
FDI in single brand and multi brand retail : C4 group BNA PPT

10. Indira Institute Of Management Pune
References
 http://www.economist.com/blogs/banyan/2012/09/indian-economic-reforms
 Business standard
 Wikipedia
 Economic Times
FDI in single brand and multi brand retail : C4 group BNA PPT