FDI allows foreign investment in retail in India. Single-brand retail allows up to 51% FDI for stores selling a single international brand. Multi-brand retail, which allows foreign stores to sell multiple brands, is currently not permitted. Organized retail makes up 3-4% of the market while 96% is unorganized. FDI could impact unorganized retailers through unfair competition but benefit organized retailers and farmers through better prices and supply chains. It may also benefit consumers through variety and quality while creating jobs. Issues around its impact still need monitoring and regulation.

2. WHAT IS FDI….?????
FDI as defined in Dictionary of Economics
is “investment in a foreign country through
the acquisition of a local company or the
establishment there of an operation on a
new site”.
To put in simple words, FDI refers to
capital inflows from abroad that is invested in
or to enhance the production capacity of the
economy

3. Current FDI Policy with Regard to Retailing in India
FDI in Single Brand Retail FDI in Multi Brand Retail
In single-brand retail, FDI up to 51
per cent is allowed • FDI in Multi Brand retail implies that
Subject to the following conditions…. a retail store with a foreign
investment can sell multiple brands
under one roof.
(a) Only single brand products would
be sold • FDI is not permitted in Multi Brand
Retailing in India
(b) Products should be sold under the
same brand internationally,
(c) Single-brand product retail would
only cover products which are
branded during manufacturing
(d) Any addition to product categories
to be sold under “single-brand”
would require fresh approval from
the government.

4. INDIAN RETAIL……
• India is fifth most attractive emerging retail market: a
potential goldmine.
• Indian retail is largest among all industries(200 billion $).
• 96% Unorganized, 4% organized
• Contributes to the 10% of India’s GDP.
• Growing at the rate of 20-25%
• Provides 8% - employment

5. UNORGANISED RETAILERS ORGANISED RETAILERS
•2nd largest self employment, after • Constitute 3-4% of trading mass
agriculture • Payers of sales, income and various
•Link between producer and taxes
consumer • Constitute corporate players like Birla
more, reliance group, Pantaloons,
•Very marginal traders(35% of this has future groups.
investment below 30,000 and lives • Corporate retailers have well
with 2$ per day) established outlets in 125 and more
•Most of them constituted by cities
HUF(family is depended) • Not adopted complex procurement
•13%-15% are women workers chains like Wallmart, Carrefour
•Poor hygiene, illeteracy, no • Financially weaker when compared
to foreign players.
government benefits

6. POSSIBLE IMPACT ON
UNORGANISED RETAILERS
• It would lead to unfair competition and
ultimately result in large-scale exit of
domestic retailers
• Entry of large global retailers such as Wal-
Mart would affect the unorganized retailer
• leading to large scale displacement of
persons employed in unorganized retail
• There may be consolidation and it may
lead to monopoly in the long run

7. IMPACT ON ORGANISED RETAIL
• As foreign retailers want penetration
into market, they partner the well
established Indian corporate retailer
• Fund flow is increased there by, can
expand stores to towns with population
of 10 lakh and above.
• Retail managerial expertise and high
level shopping malls come up
• Creation of jobs for middle level
managers with retail expertise
• Marginal organized traders may be
thrown out

8. AGRICULTURE
• 65% of Indian population is engaged in agriculture and agricultural labour
• Have major responsibility in food security
• Marginal producers with 2 to 3 acres of land holdings
• Illeteracy backed by poverty
• Facing problem with pricing, middle agent exploitations
• Poor market infrastructure/warehousing
• Problem of transportation
• Poor road connectivity in rural areas
• No modern technique adopted
• Dependent on rain(undeveloped irrigation)

9. OPPORTUNITY
• Giant retailers make purchase directly from farmers
• Farmers get up-to-date market price prior to selling
• Income increases
• Collective farming
• Quality seeds, fertilizers on time
• Enormous saving on wastage that occur from post harvest stage till it reaches
consumer
• Introduction of modern farming technology
• Opportunity of mixed farming, there by increased income
•

10. CHANGING SCENERIO OF SUPPLY CHAIN

11. FOOD PROCESSING
INDUSTRY
• India is second largest producer of fruits and
vegetables in the world
• Negligible development in food processing sector
• 35-40% of produce is wasted
• No investment in value addition of farm product
• Poor productivity in diary sector

12. OPPORTUNITIES
•Government has stated 30-35% procurement
from Indian SME’s
• Export oriented plans from FY’12
•Estimated potential of 20,000 crore business by
2020
•Will emerge as one of the largest employment
providing sector
•Will contribute largely to GDP

13. WAREHOUSING AND LOGISTICS
•There will be huge investment on warehousing
and logistics
•Investment in cold storage units is estimated to
Rs. 800 crore
•Creation of jobs in this sector for semi skilled and
unskilled labourers
• Can add up 7% employment
•Distress selling can be prevented
•Wastage is enormously reduced
•Investment in cold storage can improve pesicultre
and allied meat sector

14. CONSUMERS GOVERNMENT
• About 122 million consumers • Increased tax from organized
will be benefited sector
• Increased GDP
• Quality commodity at low
• Creation of new employment
price opportunity
• Wide range of products at one • Farmer development
store • Major step in food security
• Benefits of modern shopping • Protection of 122 million
consumer interest

15. CONCLUSION
• The Indian retail sector in is severely constrained by
limited availability of bank finance, efficiency should be
brought is lending policy, so there should be some time
gap
• There should be a national commission to monitor the
functioning of foreign player, and state commission to
safe guard the pricing policy
• Sufficient measure should be taken to check there is
balanced regional development
• Entry of foreign player should be gradual and initial
investment should flow to back-end infrastructre,and
then should be issued with license to trade