Foreign Direct Investment in Retail Sector in India: Opportunities And Challenges

Author: Deepak Kumar*, Sachin Goel

Abstract:
On November 24, 2011, The Union Cabinet of the Indian Government approved a proposal of allowing 51 per cent FDI in the multi-brand retailing in India and 100 per cent FDI in the Single-brand. The United States suggest that FDI in organized retail could help tackle Inflation, particularly with whole sale prices. As a result the Indian government has stalled the implementation of this proposal which has temporarily washed off the wishes of the global retail player awaiting a bite of the Indian retail Market. FDI should be opened in a gradual phased manner, allowing a lead- time for the Indian retailers to strengthen their position. India?s retail sector remains off?limits to large international chains especially in multi-brand retailing. A number of concerns have been raised about opening up the retail sector to FDI in India. The first concern is the potential impact of large foreign firms on employment in the retail sector. A second related concern raised in the DIPP?s report is that opening up FDI would lead to unfair competition and ultimately result in large- scale exit of incumbent domestic retailers, especially the small family-owned business.

Keywords:MIGA, CII, UNCTAD, Single- Brand and Multi- Brand.

DOI:

International Journal of Trade & Commerce (Vol: 2 Issue:2)