Implications of Foreign Direct Investment in Retail Sector

Abstract

The retail industry in India is correctly considered as one of the sunrise sectors in the economy. The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over I0 per cent of the country's Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the world's fifth-largest global destination in the retail space. The Boston Consulting Group and Retailers Association of lndia published a report titled, 'Retail 2020: Retrospect, Reinvent, Rewrite', The report adds that while the overall retail market is expected to grow at 12 per cent per annum , modem trade would expand twice as fast at 20 per cent per annum and traditional trade at I0 per cent. As we are aware that India is a country of small shopkeepers & small kiryana shops serve as source of earning livelihood to a major chunk of Indian population. The traditional retail industry in India is dominated by the unorganised retailing & it is highly fragmented also. The present article is about studying the repercussions of allowing FDI in retail in India. One the one hand, it is expected to affect unorganised retail and at the same time, it is expected to bring drastic changes in supply chain management tools. The Indian retail industry in the single-brand segment has received Foreign Direct Investment (FDI) equity inflows totalling US$ 275.4 million during April 2000- May 2015, according to the Department of lndustrial Policies and Promotion (DIPP).