Foreign Direct Investment and Retailing in India: Opportunities and Challenges

Desti Kannaiah and A. Vinayagamoorthy

International Journal of Economics and Finance, 2016, vol. 8, issue 12, 216-223

Abstract: India being second most-populous country has immense scope for retail expansion as along with time urbanization and consumerism has also been increasing. Initially India was conservative regarding FDI; it imposed restriction on foreign companies to limit their share in equity capital of their Indian subsidiaries but over the time Government of India gradually liberalized foreign investment in various sectors. Recently in 2011 India permitted 100% FDI in single brand retail and in 2012, 51% FDI permitted in multi brand. Even though organized retail sector in India is at the infant stage, India has today become a budding target for FDI. India today offers the most persuasive investment opportunity for mass merchants and food retailers looking to expand overseas as Indian economy is growing at a rapid pace with consumers having high purchasing power. FDI is a sturdy source for the intensification of retailing and will create enormous opportunities for innovation in retail sector in India but at the same time it is quite likely that a section of the domestic retailing industry will be severely hurt due to the entry of foreign retailers. In this paper researchers have tried to accentuate both the thoughts in detail and concluded the most constructive view on Opportunities and Challenges of FDI in Indian Retailing.

Keywords: Foreign Direct Investment (FDI); retail sector; India; single & multi-brand retail (search for similar items in EconPapers)
Date: 2016
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