Foreign Direct Investment in Indian Retail Sector: Maturation or Diminution?

Abstract

Indian retail industry is one of the largest and fast paced industries, accounting for more than 10 per cent of the country's GDP and providing employment to 8 per cent of the population, encouraging large number of domestic & global players to enter the market. The Government of India on 20th September, 2012 has approved 51% FD/ in Multibrand retail and 100% in Single Brand retail sector through Government Route with some pre-conditions. The Indian Retail Industry is the fifth largest in the world. It comprises of organized and unorganized sectors. Unorganized retail sector in India comprises 97% of the retail business and the rest 3% is contributed by the organized sector. The unorganized retail sector contributes about 13% to the GDP and absorbs 6% of our labour force. Hence the issue of displacement of labour consequent to FD/ Retail Sector is of primal importance in India. The objective of this paper is to study the likely impact of FD/ in single as well as multi brand retailing in India and to examine the effect of FD/ (Retail) on various components of Indian economy.