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Overview of India's Retail Industry and FDI

The document discusses the Indian retail industry, major retail formats, and FDI in retail. Some key points: - The Indian retail industry is the 5th largest in the world and is growing at 25-30% annually, contributing 12% to India's GDP. - Major retail formats in India include mom-and-pop stores, department stores, malls, supermarkets/hypermarkets, and e-tailers. - Current FDI regulations allow 100% FDI in wholesale cash-and-carry and 51% in single-brand retail, but there is debate around allowing FDI in multi-brand retail. - Supporters argue FDI could boost investment, jobs,

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78 views17 pages

Overview of India's Retail Industry and FDI

The document discusses the Indian retail industry, major retail formats, and FDI in retail. Some key points: - The Indian retail industry is the 5th largest in the world and is growing at 25-30% annually, contributing 12% to India's GDP. - Major retail formats in India include mom-and-pop stores, department stores, malls, supermarkets/hypermarkets, and e-tailers. - Current FDI regulations allow 100% FDI in wholesale cash-and-carry and 51% in single-brand retail, but there is debate around allowing FDI in multi-brand retail. - Supporters argue FDI could boost investment, jobs,

Uploaded by

atulnaikparrikar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

FDI

Multi-brand retail
India Retail Industry
 5th largest in the world
 One of the fastest growing industry in India
 The industry is expected to grow at a pace of
25-30% annually.
 contribution of 12% to the national GDP
 employing 7% of the total workforce (only
agriculture employs more) in the country
 the most promising emerging market for
investment
Kinds of retail formats
• Mom-and-pop stores
• Category killers
• Department stores
• Malls
• Specialty Stores
• Discount stores
• Hypermarkets/ Supermarkets:
• Convenience stores
• E-tailers
• Vending
Retail segments
Food & Grocery: Big Bazaar, Food Bazaar
Home Solutions: Hometown, Furniture Bazaar,
Collection-i
Consumer Electronics: e-zone
Shoes: Shoe Factory
Books, Music & Gifts: Depot
Health & Beauty Care: Star, Sitara
E-tailing: [Link]
Entertainment: Bowling Co
Major Retailers in India
• Tata Group
• RPG Group
• Reliance
• AV Birla Group
Current scenario
• India has 15million-plus retailers who account for
$350-plus billion of annual sales.
• The retail space is dominated by the unorganized
sector that contributes to 94 %of the sales
• As the economy keeps on growing, the retail market
will continue to make progress
• Customers will demand better products and services
in line with their growing income and aspirations
• This will require large-scale investments in
manufacturing, retail space, technology, food
logistics, processing, etc.
Challenges facing Indian retail industry
The tax structure in India favors small retail business
Lack of adequate infrastructure facilities
High cost of real estate
Dissimilarity in consumer groups
Restrictions in Foreign Direct Investment
Shortage of retail study options
Shortage of trained manpower
Low retail management skill
Current FDI in retail
• 100 % FDI in cash-and-carry wholesale trading
and export trading through the automatic
route
• 51 % FDI is permitted in single brand retailing
• Should FDI be allowed in Multi brand
retailing?
Benefits of FDI in retail
• Inflow of investment and funds.

• Improvement in the quality of employment.

• Generating more employment.

• Increased local sourcing.

• Provide better value to end consumers.

• Investments and improvement in the supply chains and warehousing.

• Franchising opportunities for local entrepreneurs.

• Growth of infrastructure.

• Increased efficiency.

• Cost reduction.

• Implementation of IT in retail.

• Stimulate infant industries and other supporting industries .


Drawbacks of FDI in retail
• Would give rise to cut-throat competition rather than promoting incremental
business.

• Promoting cartels and creating monopoly.

• Increase in the real estate prices.

• Marginalize domestic entrepreneurs.

• The financial strength of foreign players would displace the unorganized players.

• Absence of proper regulatory guidelines would induce unfair trade practices like
Predatory pricing.
FDI in retail: More benefits than costs

• the entry of large global retailers such as Wal-


Mart would kill local shops and millions of
jobs.
• the global retailers would collude and exercise
monopolistic power to raise prices and
monopsonistic (big buying) power to reduce
the prices received by the suppliers.
Advantages of FDI in retail
• FDI can have some positive results on the
economy
• consumer is benefited by both price
reductions and improved selection
Disadvantages of FDI in retail
• “modern retailing”
• will render millions of small retailers jobless by
closing the small slit of opportunity available
to them.
• Entry of wall mart
?

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