Fdi Retail
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FDI refers to investment from foreign companies in a host country either through acquiring a local company or establishing new operations. The current size of India's retail market is $28 billion and is expected to grow to $260 billion by 2020. Foreign investors are allowed to invest in most sectors in India but some require approval. Conditions for foreign retailers include at least 50% investment in infrastructure and only opening stores in cities with over 1 million people. While FDI can boost economic growth and jobs, it may also harm small businesses. The conclusion is that FDI in retail can significantly increase India's organized retail market and income if the government continues to support it.
Fdi Retail
- 3. What is FDI ? FDI is investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new site. FDI also refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy.
- 4. Retailing in India Retailing is an Interface between the producer and the individual consumer buying for personal consumption Retailing Types in India 1. Organised Retailing 2. Unorganised Retailing Size of Indian retail market The current size of Indian retail market is around 28 billion dollars which is expected to reach the level of around 260 billion dollars in 2020.
- 5. Foreign Direct Investment Policy in India The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (‘FIPB’) would be required. Conditions to be fulfilled by foreign countries to enter Indian markets 1. Amount of investment 2. Places of opening stores 3. At least 50 % of their investment should be in back-end infrastructure like warehouses etc
- 6. For the country, for the people of the country Foreign investors allowed only 51% ownership as opposed to other countries that allows 100% Retail stores can be established in only 53 cities across the country, with a minimum population of 10 Lakhs
- 8. Merits of FDI 1. Growth in economy 2. More consumer savings 3. Benefits to farmers 4. Increase in employment opportunities 5. Increase in government revenue Demerits of FDI 1. Destruction of small entrepreneurs 2. Shrinking of jobs 3. No real benefit to farmers
- 9. CONCLUSION Opening up of FDI can increase organized retail market size to $260 billion by 2020. This would result in an aggregate increase in income of $35-45 billion per year for all producers combined; about 3-4 million new direct jobs and around 4-6 million new indirect jobs. So, the future of India lies in FDI & the government must proceed in that direction if it wants to make the Indian economy a developed economy and become a super power.
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