Title: FDI in RETAIL

Presented by:-
Akash rana
Mcom part-1
Roll no- 46

Under the guidance of Prof. Rossy Mathur

INCON 2014
 Objectives of study
To Know the reasons for investing retail
industry in India.

To Analyze the impact of FDI in retail sector in

India.

To Study the trends in FDI in different sector in

India.
 Introduction
What is the meaning of FDI ?
The Foreign Direct Investment means cross border investment made
by a resident in one economy in an enterprise in another economy,
with the objective of establishing a lasting interest in the investee
economy.
 Types of Retailing in India

Single Brand- Single brand implies that foreign

companies would be allowed to sell goods
sold a retail store with foreign investment can
only sell one brand .(Adidas, Lee, Nike)
Multi Brand- FDI in Multi Brand retail implies
that a retail store with a foreign investment
can sell multiple brands under one roof.
(Lifestyle, Metro shoes)
 Types of Retail market

Organized - trading activities undertaken by

licensed retailers, that is, those who are
registered for sales tax, income tax, etc. Eg:
Corporate backed hypermarkets.

Unorganized - traditional formats of low-cost

retailing, for example, the local kirana shops,
owner manned general stores, paan/beedi
shops, convenience stores, hand cart and
pavement vendors, etc.
 FDI in Retail
Current Position:
FDI is permitted only in single brand product
retailing 100%.(from January 2012)
In multi brand 51% (from September 2012)
FDI cap in Broadcasting was raised to 74% from
49%.
 Impact of FDI in Retail in India
1. Consumers access to some of the major
global brands.
2. Improved quality and variety of products.
3. Increase competition and expand
manufacturing.
4. It gives consumers competitive advantage.
5. Influences the consumers standard of living.
 Immense growth opportunities for
Retailers
India is Asias third largest retail market after China
and Japan. Organized retailing is very virgin space in
India.
Currently Indian Retail sector have sales of around
$500 billion.
Retail sector is expected to have sales of $900
billion by 2014. It still far behind China, whose retail
sales by 2014 is expected to cross $4500 billion
mark.
lifestyle products that are widely accepted by the
urban Indian consumer.(Apparels, Cosmetics, Shoes,
Watches, Beverages, Food and even Jewellery)
Submitted by:-
Ministry of Commerce and Industry
to lok Sabha
 Revised FDI policy
The government has notified changes in the FDI
policy, paving the way for larger overseas
investments in sectors such as multi-brand retail.
As per the revised FDI guidelines, the government
relaxed norms for multi-brand retail trading and
eased the mandatory 30 per cent local sourcing
norms for companies. As much as 100 per cent FDI
in single-brand retail was allowed, of which 49 per
cent is through the automatic route.
The investment cap in defense production was
retained at 26 per cent.
In courier services, FDI of up to 100 per cent was
allowed under the automatic route.
 FDI proposals approved till May 2013
The government approved a total of 18 foreign direct
investment proposals worth USD 173 million in May
2013.
During April 2010 and May 2013, India also attracted FDI
worth USD 256.7 million in agriculture services.
As per extant FDI policy, FDI is not permitted in real estate
business. There is no proposal under consideration to
amend the said policy.
In April, Swedish clothing giant Hennes & Mauritz
received approval to open 50 stores across the country
with a planned investment of Rs700 crore.
Foreign retailers will now be allowed to open stores in
cities that have a population of less than one million.
 Recent Trends in FDI
FDI in specialty stores: Multi-brand organized retail in
specialty stores such as Consumer Electronics,
Footwear, Furniture and Furnishing etc. are expected to
expand and mature in the next few years.(e-zone,
Reliance footprint)
Dominance of unorganized retail: Flexible credit
options and convenient shopping locations may help
traditional retail to continue its dominance in retail
sector.
Growth in small cities and towns: Stiff competition and
saturation of urban markets is expected to drive
domestic retail players to tap the potential in small
cities
 Conclusion
FDI provides India with stability in inflow of funds, access to
international markets, export growth, transfer of technology and
skills and improves balance of payments.
More FDI does not necessarily guarantee high growth rates. The
relative emphasis must shift from a broad (scatter shot) approach
to one of targeting specific companies in specific sectors. Socially
responsible FDI should be encouraged through the development of
national and international investment guidelines and regulations.
FDI is beneficial to Indias growth and Indias growth is beneficial for
FDI. India needs to create a talent pool suitable for the investors
and it needs to develop infrastructure that will encourage the
investors. These steps taken by India to bring FDI will also help India
to grow on its own. FDI if monitored and nurtured in such a way
that it will bring more skills and resources to India will be mutually
beneficial.