* Assistant Professor, Institute of Management Studies, Shivagangothri, Davangere University, Davanagere.
** Faculty of Management, Institute of Management Studies, Shivagangothri, Davangere University, Davanagere.
Online published on 7 February, 2013.
Indian retail industry is one of the sunrise sectors with huge growth potential. However, in spite of the recent developments in retailing and its immense contribution to the economy, retailing continues to be the least evolved industries and the growth of organized retailing in India has been much slower as compared to rest of the world. Liberalization of trade policies during the last one and half decade has led India to become an investment friendly country. Foreign Direct Investment (FDI) in this country assumed critical importance in the context of this liberalization.
According to the Investment Commission of India, the retail sector is expected to grow almost three times its current levels to $660 billion by 2015. It has made India the cause of a good deal of excitement and an investment destination. With a contribution of 14% to the national GDP and employing 7% of the total workforce (only agriculture employs more) in the country, the Retail industry is definitely one of the pillars of the Indian economy. The latest move of the Government of allowing FDI in Indian retail sector encourages the retailers who are looking beyond their organizational boundaries to develop and leverage the resources and capabilities of their supply chain partners to create superior value and competitive advantages in the marketplace. FDI plays a vital role for economic growth through its strengthening of domestic capital, productivity and employment and also it would undoubtedly enable India and Bangladesh Inc to integrate its economy with that of the global economy. But a great debate has cropped up against the government plans for allowing FDI in Retail sector by the small traders who are in the belief that the opening up of the big markets or foreign-sponsored departmental outlets will not necessarily absorb them; rather they may try to establish the monopoly power in the country. Thus, as a matter of fact FDI in the buzzing India and Bangladesh retail sector should not just be freely allowed but should be significantly encouraged.
In this context the present work makes an attempt to study the likely impact of FDI on India and Bangladesh retail sector whether good or bad, opportunities & challenges. It analyses the reasons why foreign retailers are interested in India and Bangladesh, their prospects in India and Bangladesh and also find out the suggestions for the future growth of the retail industry.
Foreign Direct Investment, Liberalization, Retail, Economic Growth, Opportunities & Challenges, Globalization, Strategic Issues and Prospects
