India is witnessing strong growth prospects in organized retailing with foreign retail players willing to make investment in the sub continent. India, being the country with the second most-population, has immense scope for retail expansion as along with time, urbanization and consumerism has also been increasing.
The retailing sector contributes about 10 percent to the GDP and is estimated to be around billion US dollar. Retailing market in India has become the fastest growing market in the world and ranked in top five retail markets in the world.
Retailing sector of India has observed major growth in recent years only. FDI has been showered to the Indian industry After seeing the boom in Indian retail market many foreign companies want to enter in Indian retail market.
Foreign Investment is considered as an important part of a domestic investment and at the same time, it will help to create growth in business, trade, employment, demand, consumption, income, and manufacturing.
Before moving to FDI in retail we should know about the single brand and multiple brand retail.
Single Brand Retail There will be on only one brand in a single retail store is known as single brand retail. Rebook and Nike is the best example for single brand retail. Multi-Brand Retail There will be multiple brands in the single store is known as multi-brand retail.
Till Nov, the Indian government has allowed only 51 percent of foreign direct investment in single-brand retail and there has to be percent cash and carry only and there was no place for multiple brand retail.
impact of liberalization of the policy of FDI on retail sector of Indian economy. Retailing is the interface between the producer and the individual consumer buying . IRJMST Volume 5 Issue 2 Online ISSN - Impact of Foreign Direct Investment on Retail Sector in India *Manoj Kumar Assistant Professor, Deptt. of Commerce, caninariojana.com (PG) College, Hansi ABSTRACT Foreign direct investment (FDI) plays an important role in India’s growth dynamics. There are. The FDI when allowed will be seens as an anti-protectionist policy with the unorganised retail sector up in arms. However from a broader economy perspective it may be .
Now it has come to 51 percent to multiple brand retail and percent to single brand retail. Till now there is only one company which has received permission to open a store under multiple brand retail categories.
The foreign direct investment has created many regulations for foreign companies like sourcing of goods is mandatory from MSMEs and there will be the certain percentage of investment in the infrastructure.
There are many conditions which act as a bar to foreign companies. And if they allowed doing the retail of made in India products then there will be no condition on them. Last year, the government of India has permitted the rate of FDI will be percent in trading of domestic goods.
Foreign companies will invest in our country and our country will serve as a host country and lots of ideas and technology will be imported from parent company thus it will help to an overall improvement of goods.
AS per survey, 70 percent of people feel that FDI in retail sector will improve the supply chain efficiencies of the small and medium enterprises sector. Domestic investment will be complemented with the fixed direct investment.
The small and medium enterprises will receive benefits from FDI and will provide global exposure and create great opportunities in the global market.
FDI helps to create a link between different economies. Different types of new technologies will be promoted. It also helps to promote its product and act as a host of the economy in the international market. There will be the positive effect on the economy with the increased flow of FDI.
Capital and labor market will be affected by FDI in the retail market. There will be a lot of technology transfer from the parent company to the host company. The Government of India is also expected to announce the relaxation of FDI in many sectors and it includes single brand retailing too.
The relaxation of FDI policy was there in the announcement made by the finance minister of India in the budgets.
FDI will help to maintain the balance of payment and it will also help to strengthen the value of our currency against others. The inflow of FDI in the year is around 36 billion dollar approx… Thus we can simply say that FDI in the retail sector has a positive impact on small and medium enterprises sector and very important to the overall growth of the country in the global market.Retail FDI in India India is one of the most lucrative retail markets in the world, making it a magnet for big retail brands from different countries.
Global brands like H&M, Marks & Spencers, McDonalds, Burger King, Starbucks and Ikea have entered India and seen encouraging results. The impact of FDI in retail on SME sector November 6, News Desk Current Affairs, Opportunities 0 The retailing sector has become one of the emerging sectors and also known as the backbone of the Indian economy.
Externalities from foreign direct investment in the Mexican retailing sector, Cambridge Journal of economics, 31, pp. – Gupta, R. (). FDI in Indian Retail Sector: Analysis of Competition in Agri-Food Sector, Internship Project Report,Competition Commission of India. The Union Cabinet has approved 51% FDI in multi-brand retail and raised the cap on FDI in single-brand retail from 51% to %.
Partner & National Leader - Retail and Consumer Products, Pinakiranjan Mishra, and Partner - Tax, Paresh Parekh, share their views on this development. Growth of the. The FDI when allowed will be seens as an anti-protectionist policy with the unorganised retail sector up in arms.
However from a broader economy perspective it may be . The Globalization of Trade in Retail Services emerging markets to retail FDI via policies of full or partial market access liberalization; push factors and found to have a sizeable impact on imports from the host to the home economies of retail TNCs.