The document provides an overview of Foreign Direct Investment (FDI), particularly in the Indian retail sector, highlighting its structure, potential impact, and growth projections. It discusses the divide between organized and unorganized retail, the dominance of large retailers like Wal-Mart, and various economic factors affecting local markets. Concerns regarding job losses, market monopolization, and the implications for domestic businesses are emphasized alongside arguments for and against FDI in India.

1. www.dineshvns.com

2. what is FDI?
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3. The commitment of money or
capital to purchase financial
instruments or assets in order to
gain profitable returns.
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4. Foreign
Investment
through
Investment done by citizens and
government of one country (home
country) invest in industries of
another country (host country).
Foreign
Direct
Investments
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Foreign
Institutional
Investors

5. Automatic Route
No permission required
Government
Approval /License required.
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6. • One of the world's largest industries exceeding US$ 9
trillion.
• Dominated by developed countries.
• 47 global fortune companies & 25 of Asia's top 200
companies are retailers.
• US, EU & Japan constitute 80% of world retail sales.
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7. • Retail trade in Europe employs 15% of the European
workforce (3 million firms and 13 million workers).
• The world’s population is poised to expand 50% by 2050.
The world currently comprises of 78% poor, 11% middle
income and 11% rich.
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9. Indian Retail Industry
Organized retail:
trading activities undertaken by licensed retailers, that is, those who
are registered for sales tax, income tax, etc.
Un-Organized retail:
traditional formats of low-cost retailing, for example, the local Kirana shops,
owner operated general stores, paan/beedi shops, convenience stores, hand
cart and pavement vendors, etc.
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10. Format
Description
Retailers
Hypermarkets
Offering basket of product
Spencers, Big bazaar
Cash and Carry
Bulk-buying requirement
Bharti-wal-mart
Departmental stores
Large layout, Wide merchandise
mix
Lifestyle , Globus
Supermarkets
Household product as well as food
as integral part of the service
Apna bazaar , food
bazaar
Shop-in-shop
Shops located in shopping malls
Navras ( big bazaar)
Specialty stores
Focus on individual product type
Brand Factory
Category killers
Particular segment
The LOFT
Discount stores
Branded product at discounted
prices
Subhiksha, levi’s
outlet
Convenience stores
Small Retail stores
In and out
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11. Retail Segment
Percentage holding
in sector
Major retailers
Food and grocery
63%
Reliance fresh, Café
brio, food bazaar
Clothing, textile and
fashion
9%
Westside, shoppers
stop, globus
jewellery
5%
Tanishq
Catering services
5%
IRCTC
Consumer durable
4%
Viveks, vijay sales,
Croma
pharmaceuticals
4%
Piramal group
Entertainment
3%
Bowling co.,
Furnishing, utensils
3%
Hometown, Tangent
Concept
Mobile handsets
2%
The mobile store,

12. India is a developing country.
Indian market is very large market
Retail is the topmost growing market in India
The environmental and political factors are not that much
bad in India.
 Tax breaks, import duty exemptions, land and power
subsidies, and other enticements.
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13. The total retail sales in India will grow from US$
395.96 billion in 2011 to US$ 785.12 billion by 2015
 Accounts for 14% of countries GDP
Accounts for 8% of countries employment
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14. • 100% FDI is allowed in wholesale cash and
carry trade.
• 51% FDI in single brand retail
• No FDI in multi brand retail
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15. WHAT WILL HAPPEN TO RETAIL TRADE
 These companies open chain of shops. With a shop in each area the retail small
shopkeepers will be put to heavy loss
 Slowly the local shops will start closing down.
 These shops will capture the trade.
 In countries where they have established their market share is
Name of Country
America
England
Western Europe
Brazil
Thailand
Korea
China
% of Market Share
80%
80%
70%
40%
40%
35%
20%
 Imagine Roadside DHABA’s after RELIANCE FOOD CHAIN Starts working.
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16. WHAT WILL HAPPEN TO
LOCAL RETAIL TRADE
 No of Retail outlets Between 1981-99 in United Kingdom came
down from 56862 to 25800.
 Between 1970-80 in Europe about 4 lakhs Retail shops were
closed.
 Competition shall be limited to Big Retail Houses
 In the year 2000 Five Big Fast food companies captured following
percent market share :
Country
Norway
Switzerland
Sweden
UK
Portugal
% Share
99
88
94
64
57
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17. WHAT HAPPENED IN THAILAND
 In price war traditional shop keepers are facing problem of survival. Many
small shop keepers have closed down their shops.
 Big companies have seen growth of 40%
 There was adverse impact on 60000 small shopkeepers.
 The Prime Minister of Thailand agreed that there was adverse impact on
retail trade.
 The Govt. which had opened its door for FDI in retail trade with big bang
had to provide financial assistance to retail traders by establishing a special
fund.
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18. Now its India’s turn
Threat on unorganized retail players
Threat on organized retail players
 Marginalize the domestic players
 Huge spread of retail chain stores
 Monopoly in the customer market and can be converted into cartel of
global players.
 Monopoly among suppliers
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19. FDI in organized multi brand retail:
India not yet ready
Employment loss:
 There are about 35 towns in India with population exceeding 1 million.
There are at least 4, 32,000 people employed in these towns in India in
small-scale to medium-scale shops. With the entry of big chains, many of
them will lose jobs.
 In food retail, farmers (the producers right at the tip of the back end chain)
being left at the mercy of the foreign investors
Inflation cannot be checked:
The point is that inflation cannot be checked as consumers would still have
to bear the cost
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20. WHO ARE WE LETTING IN?
Annual turnover $ 400 bn
18 lakh rs. crores
Annual turnover $ 130 bn
5.85 lakh rs. Crores
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21. Annual turnover $ 100 bn
4.5 lakh rs. crores
Annual turnover $ 96 bn
4.2 lakh rs. crores
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22.  Introduction Of
Brief Introduction Of IKEA
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23. Cont….
 These are some of the ferocious, predatory companies in the world.
 Their practices in the market are ruthless and designed to wipe out
competition.
 Their resources are enormous. They can invest and lose money for
years till then lakh of local retailers will be wiped out.
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24. Comparison between Wal-mart and Indian
retail industry
 The annual turnover of Wal-Mart (Sales in 2010 were $409 billion) is
higher than the size of Indian retail industry (estimated at about $370
billion) and almost 100times more than the turnover of HUL (India's
largest FMCG company).
 The size of any Wal-Mart store is much higher than the size of any
existing shopping mall in India.
 Wal-Mart has over 8500 stores (over 95 million square meters) where
as none of India's large format store (Shoppers' Stop, Westside,
Lifestyle) have more than 250.
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25. Cont….
 New stores opened annually by Wal-Mart are about 600, much higher
than all organized Indian retailers put together.
 Wal-Mart has around 40,000 suppliers throughout the world and
more than 700,000 SKU's on its web site, a number that cannot be
compared.
 Daily customers are about 18 million (almost equivalent to Mumbai's
entire population).
 Time between each Barbie Sale at Wal-Mart is just two seconds (same
rate at which babies are produced in India!)
 None of the Indian organized retailer has ventured overseas where as
Wal-Mart is now in 15 countries and will expand to 21 countries in two
years.
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26. arguments in favor of FDI
Factors necessitates FDI in India
To achieve expected growth in Indian GDP by
encouraging export.
To reduce gap between farm prices and final retail prices
through structural change in distribution - Inflation
control mechanism.
To acquire market-savvy, market-intelligent and best
management practices.
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27. To bring trade balance
To increase liquidity by the way of foreign exchange
reserves
Modernize the supply chain
Will bring healthy competition in market
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28. arguments against of FDI
Main THREAT to the local companies
FDI will drain out the country’s share of revenue to
foreign countries which may cause negative impact on
India’s overall economy.
An economically backward class person suffers from
price raise.
Will Prices reduce for consumers is the Big
Question.
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29. Thank you
for Your Interest
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