An Economic Analysis of Foreign Direct Investment in Retail Sector in India

An Economic Analysis of Foreign Direct Investment in Retail Sector in India
Author: Girish Garg
Publisher:
Total Pages: 19
Release: 2014
Genre:
ISBN:
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India has been placed at first position in the category of countries with the best opportunity for investment in retail sector. The increasing disposable incomes among the Indian middle class and increasing young population have been cited as the main reasons for such attractive optimism. Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP. The Indian retail market is estimated to be US $450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people. After months of discussion with various hurdles on 14 September, 2012 the cabinet approved the foreign direct investment in retail in India allowed 100% FDI in Single Brand and 51% FDI in Multiple brand with many preconditions. The minimum FDI limit has been set at $100 million. Half of any investment has to make in infrastructure like cold-storage chains and warehouses. With at least 30% of the goods to be sold will have to source from local producers.On December 5, 2012 in Lok Shaba after long discussion also given approval to FDI in retail as per the cabinet approval with some amendments likes FDI in retail in cities with a population over one million as well as the states of India have the prerogative to accept it and implement it or they can decide to implement it if they so choose. Actual implementation of policy will be within the parameter of state law and regulations.This Research Paper makes a modest attempt of developing an insight as to what are the trends in the Indian Retail Industry and to the benefits and drawbacks of FDI in this sector. It has also focused on whether this policy will be beneficial for the Indian Economy as a whole or not.

Foreign Direct Investment (FDI) in India's Retail Sector

Foreign Direct Investment (FDI) in India's Retail Sector
Author: Hiranya K. Nath
Publisher:
Total Pages: 12
Release: 2013
Genre:
ISBN:
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This article presents an overview of retail trade in India in the wake of the country's new policy that will allow foreign capital in multi-band retailing. It discusses various potential benefits and costs of foreign direct investment (FDI) in the retail sector, particularly in terms of its effects on traditional retailers, employment, consumers, farmers, and local manufacturers. It argues that given somewhat slower growth projection for the Indian economy during the next decade, various structural issues including inadequate infrastructure and a lack of affordable real estate, and the prevalent structure of the agricultural markets, it is unlikely that all the potential benefits and costs will be realised to heir fullest extent, at least in the foreseeable future. The economic dynamics and the political process will play an important role in determining the outcomes of this move to allow FDI in the retail sector and will ultimately determine the effects on various stakeholders.

Analysis of Global Foreign Direct Investment

Analysis of Global Foreign Direct Investment
Author: Murali Guruswamy
Publisher: GRIN Verlag
Total Pages: 114
Release: 2014-03-27
Genre: Business & Economics
ISBN: 3656624348
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Master's Thesis from the year 2014 in the subject Business economics - Offline Marketing and Online Marketing, grade: Merit, University of Lincoln (PG Business School), course: Master's in Business Administration, language: English, abstract: The research report is based on studying foreign direct investments and global FDI flows. The primary part of the study focuses on understanding Foreign Direct Investment and its global flows using reports and handouts issued by economic organizations and departments. The secondary part of the research focuses on studying FDI flows between developed and developing economies. The study attempts to determine the key drivers for the FDI and determinants of FDI, using traditional FDI models and frameworks presented by research scholars and authors. Laterally, the research focuses on exploring the relationship between the determinants of FDI and advantages offered by host developing economies. The final part of the study focuses on analyzing the FDI trends in India and its likely impact on the retail trade and country’s economy. The primary objectives of the study was to study the historical and present trends in FDI flows in India and contrast the outcomes with China and United Kingdome using Dunning’s OLI paradigm and Differential rates of return. Finally, the study concludes of analyzing the outputs gathered through primary data collection methods, surveys, interviews and historical analysis, presenting the readers about the FDI flows between developed and developing economies. In the theoretical part of the research, the study attempts to explore the relationship between foreign direct investments and the motives for the firm’s to indulge in foreign direct investments. The literature part also focused defining recent trends in FDI inflows in India and its likely impact on the retail market. Different theories and models were contrasted to gain conceptual knowledge about the area of interest of the study. In the analysis and findings part, the findings that were obtained using primary and secondary data were presented with the brief interpretation in a graphical format to communicate message in a quantifiable manner. In addition, when findings of the study are related with literature review. The study emphasizes on the fact that foreign direct investment is an important source of capital for development of nation’s economy. In addition, there is an increased flow of FDI towards developing countries rather than developed countries, because the advantageous factors offered by the developing nations. [...]

Competitive Advantage of India for FDI in Retail

Competitive Advantage of India for FDI in Retail
Author: Prafulla Pawar
Publisher:
Total Pages: 15
Release: 2016
Genre:
ISBN:
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The rationale of the study was to evaluate the strategic competitive advantage of India for foreign direct investment in retail sector and also to analyse the world wide retail market opportunity as compared with Indian retail sector. Objective of this study was to analyse factors of competitiveness of nation or retail industry and relate diamond model to the India's retail industry. Different market research reports on organized retail published by market research firm, government publication, industry news and online resource were used for data analysis. Michael Porter's model on competitive advantage of nation is used here to conceptualise the determinant of diamond model. All the six determinants of competitive advantage are showing favourable sign for competitiveness of retail industry. A factor of competitiveness is support to the proposition of FDI in retail. Similarly; India can get advantage of high market demand, largest market size, economy of scale, low penetration of retail and global sourcing for retail sector.

Foreign Direct Investment in Indian Retail -- A Boon to Indian Economy

Foreign Direct Investment in Indian Retail -- A Boon to Indian Economy
Author: K. Hemalatha
Publisher:
Total Pages: 11
Release: 2013
Genre:
ISBN:
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India is in the 3rd attractive place for Foreign Direct Investment. The reason being India is the most populous democracy in the world and is the second most populated country with 1.2 billion people. The large working-age population will no doubt translate to an attractive consumer base compared to other economies of the world, placing India as one of the main targets of the 15 global retail players. The demand side factors for the growth of organized retail in India were income growth, urbanization and urban consumption, women's labor force participation and changing lifestyle and convenience and the major supply-side factor was the flow of the Foreign Direct Investment (FDI) into the retail sector following market liberalization. In terms of the Retail sector, foreign investment is currently limited to 51 percent in single brand retail stores and 100 percent FDI in wholesale cash and carry. This study has analyzed the advantages of allowing the foreign direct investment in retail sector. Secondary research was carried out in the form of a literature review, to compare and contrast and interpret the issues related to government policy specifically FDI in Retail in various countries and India.

Foreign Direct Investment, Trade and Economic Growth

Foreign Direct Investment, Trade and Economic Growth
Author: Shahid Ahmed
Publisher: Routledge
Total Pages: 326
Release: 2014-04-17
Genre: Business & Economics
ISBN: 1317809920
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This volume examines the opportunities and challenges in Foreign Direct Investment (FDI) and trade, particularly service trade, for developing and emerging economies in a globalised world. Using comprehensive case studies from India, Pakistan, Bangladesh, Association of Southeast Asian Nations (ASEAN) and other South Asian Association for Regional Cooperation (SAARC) countries, it explores various channels through which trade and FDI affect the process of economic growth and development. In particular, it determines growth trajectories impelled by service trade (such as telecommunications, transport, finance and distribution), where developing countries are playing an increasingly significant role. It also discusses value chains and production networks in the backdrop of the financial crisis of 2008. Combining theoretical and empirical tools, rigorous methodology and latest data, this work will serve as an important resource for formulation of international trade and economic policies in developing countries. It will be of special interest to students, researchers and policy makers dealing with international trade and FDI, and those in economics, commerce, business & management and political science.

A Perspective on Foreign Direct Investment (FDI) in Multibrand Retail Sector of India

A Perspective on Foreign Direct Investment (FDI) in Multibrand Retail Sector of India
Author: Prof. S. K. Baral Prof. S. K. Baral
Publisher:
Total Pages: 20
Release: 2019
Genre:
ISBN:
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The Indian retail industry has experienced high growth over the last decade with a noticeable shift towards organized retailing formats. The industry is moving towards a modern concept of retailing. The size of India's retail market was estimated at US$ 435 billion in 2010. Of this, US$ 414 billion (95 per cent of the market) was traditional retail and US$ 21 billion (5 per cent of the market) was organized retail. India's retail market is expected to grow at 7 percent over the next 10 years, reaching a size of US$ 850 billion 2020. Traditional retail is expected to grow at 5 per cent and reach a size of US$ 650 billion (76 per cent), while organized retails is expected to grow at 25 per cent and reach a size of US$ 200 billion by 2020. Despite encouraging signs, India's retail market remains largely off-limits to large international retailers like Wal-Mart and Carrefour. Opposition to liberalizing Foreign Direct Investment (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 budding stage. Based on international evidence, it is suggested that allowing entry by large international retailers into the Indian market may help tackle inflation especially in food prices. Moreover, technical know-how from foreign firms, such as warehousing technologies and distribution systems can improve supply chain efficiency in India, in particular for agricultural produce. In this paper attempt is made to analyze the direction and impact of FDI on Multi Brand Retailers. The study is based on the secondary data and information.