Fdi in Indian Retail Industry: -
FDI in Indian Retail Industry:-
“An analysis on the impact of FDI in India’s Retail sector”
Abstract
India is one of the largest emerging markets, with a approximated population of 1.22 billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 320 million. Around 72 per cent of the total households in India reside in the rural areas, where mostly traditional retail outlets, commonly called kirana stores exist. These are unorganized, operated by single person and runs on the basis of consumer familiarity with the owner. However, recently organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. Many semirural areas also witnesses entry of such organized retail outlets. FDI is a tool for economic growth through its strengthening of domestic capital, productivity and employment. FDI also plays a vital role in the up gradation of technology, skills and managerial capabilities in various sectors of the economy. Despite encouraging signs, India’s retail market remains largely off-limits to large international retailers like Wal-Mart and Carrefour. Opposition to liberalizing FDI in this sector raises concerns about employment losses, unfair competition resulting in large-scale exit of incumbent domestic retailers and infant industry arguments to protect the organized domestic retail sector that is at a growing stage. The present paper attempts to analyze impact of the FDI in Indian service sector in terms of Gowth, employment and unfair competition among organised & unorganised sectors.
Keywords: Foreign Direct Investment, Liberalization, Retail, India
1. INTRODUCTION
India is now the last major frontier for globalized retail. In the twenty years since the economic liberalization of 1991, India’s middle class has greatly expanded, and so has its purchasing power. But over the years,
“An analysis on the impact of FDI in India’s Retail sector”
Abstract
India is one of the largest emerging markets, with a approximated population of 1.22 billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 320 million. Around 72 per cent of the total households in India reside in the rural areas, where mostly traditional retail outlets, commonly called kirana stores exist. These are unorganized, operated by single person and runs on the basis of consumer familiarity with the owner. However, recently organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. Many semirural areas also witnesses entry of such organized retail outlets. FDI is a tool for economic growth through its strengthening of domestic capital, productivity and employment. FDI also plays a vital role in the up gradation of technology, skills and managerial capabilities in various sectors of the economy. Despite encouraging signs, India’s retail market remains largely off-limits to large international retailers like Wal-Mart and Carrefour. Opposition to liberalizing FDI in this sector raises concerns about employment losses, unfair competition resulting in large-scale exit of incumbent domestic retailers and infant industry arguments to protect the organized domestic retail sector that is at a growing stage. The present paper attempts to analyze impact of the FDI in Indian service sector in terms of Gowth, employment and unfair competition among organised & unorganised sectors.
Keywords: Foreign Direct Investment, Liberalization, Retail, India
1. INTRODUCTION
India is now the last major frontier for globalized retail. In the twenty years since the economic liberalization of 1991, India’s middle class has greatly expanded, and so has its purchasing power. But over the years,
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