FDI in Indian retail: Myths and realities

One of the most important developments during the last two decades is the outstanding growth of FDI in the global economic scenario. This consummate growth of global FDI from 1990 around the world made it an important and vital component of development strategy in both developed and developing nations. The home countries can take the advantage of vast market potential accelerated by industrial growth, whereas the host countries can acquire technical know-how, managerial skills and supplement domestic savings and foreign exchange. According to AT Kearney's Annual Global Retail Development Index for the year 2010, India has been placed at third rank next to China and Kuwait. It is also mentioned that the Indian retail market is worth $410 billion and only 5% sales are through organised retail. India is the most appealing opportunity for the foreign retailers. Till today, FDI in Indian multi-brand retail has not been permitted due to various reasons. Foreign investors are extremely passionate in India's retail sector. This article develops an insight to the trends in Indian Retail Industry and trace out the probable challenges. It also attempts to analyse the related pros and cons of FDI in Retail sector in India.