The Impact of FDI on Indian Retail Sector

Presently in India we are accepting investment from foreign countries in two ways: One in the form of FII-Foreign institutional Investors and other in the form of FDI. Where we know that there is no physical investment in FII, FDI is different. FII can withdraw their investment at any time depending upon the market conditions. So here is the story. On 20^th November 2012, the Union Cabinet of the Indian government approved a proposal of allowing 51 percent FDI in the multi-brand retailing in India and 100 percent FDI in the single-brand retailing, subject to certain conditions. FDI in retail can give s greater access of foreign brands to customer but at that time various political parties and people started a debate whether it should be allowed in retail or not. Some people said that FDI in the retail sector in India will lead to economic growth and creation of new employment opportunities along with rural infrastructure development and some people said that mass scale job loss will happen particularly in manufacturing sector with the entry of the big MNCs like Wal-Mart, Metro PLC and IKEA etc. In the present scenario Indian retail sector is growing at a faster rate with new employment opportunities. Although, Indian market is one of the largest market in the world with high purchasing power and it is not possible for Indian government to moving towards growth of the economy only with domestic investments. The purpose of this article is to analyse the impact of the present FDI policy on Indian retail.