Comprehensive Project
1.1 Introduction about the Foreign Direct Investment (FDI)
As per the current regulatory regime, retail trading (except under single-brand product retailing — FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a company to be able to get foreign funding, products sold bit to the general public should only be of a single-brand‘; this condition being in addition to a few other conditions to be adhered to.
India being a signatory to World Trade Organization’s General Agreement on Trade-in Services, which include wholesale and retailing services, had to open up the retail trade sector to foreign investment. There were initial reservations toward opening upon retail sector arising from fear of job losses, procurement from international market, competition and loss of entrepreneurial opportunities. However, the government in aeries of moves has opened up the retail sector slowly to Foreign Direct Investment (FDI‖). In 1997, FDI in cash and carry (wholesale) with 100% ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51% investment in a single brand retail outlet was also permitted in2006. FDI in Multi-Brand retailing is prohibited in India. All Indian households have traditionally enjoyed the convenience of calling up the corner grocery "Karana" store, which is all too familiar with their brand preferences, offers credit, and applies flexible conditions for product returns and exchange. And while mall based shopping formats are gaining popularity in most cities today, the price-sensitive Indian shopper has reached out to stores such as Big Bazaar mainly for the steep discounts and bulk prices.
Retail chains such as Reliance Fresh and More have reportedly closed down operations in some of their locations, because after the initial novelty faded off, most shoppers preferred the convenience and access offered by the local kirana store. So how this Western multi-brand
As per the current regulatory regime, retail trading (except under single-brand product retailing — FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a company to be able to get foreign funding, products sold bit to the general public should only be of a single-brand‘; this condition being in addition to a few other conditions to be adhered to.
India being a signatory to World Trade Organization’s General Agreement on Trade-in Services, which include wholesale and retailing services, had to open up the retail trade sector to foreign investment. There were initial reservations toward opening upon retail sector arising from fear of job losses, procurement from international market, competition and loss of entrepreneurial opportunities. However, the government in aeries of moves has opened up the retail sector slowly to Foreign Direct Investment (FDI‖). In 1997, FDI in cash and carry (wholesale) with 100% ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51% investment in a single brand retail outlet was also permitted in2006. FDI in Multi-Brand retailing is prohibited in India. All Indian households have traditionally enjoyed the convenience of calling up the corner grocery "Karana" store, which is all too familiar with their brand preferences, offers credit, and applies flexible conditions for product returns and exchange. And while mall based shopping formats are gaining popularity in most cities today, the price-sensitive Indian shopper has reached out to stores such as Big Bazaar mainly for the steep discounts and bulk prices.
Retail chains such as Reliance Fresh and More have reportedly closed down operations in some of their locations, because after the initial novelty faded off, most shoppers preferred the convenience and access offered by the local kirana store. So how this Western multi-brand