Retail FDI in India……. Assessment of impact: (fact finder series series; 06)

This article presents an overview of retail trade in India in the wake of the recent approval by the Union Cabinet for allowing 51% foreign direct investment (FDI) in multi-brand retail in India. It discusses various potential benefits and costs of foreign direct investment (FDI) in the retail sector, particularly in terms of its effects on traditional retailers, employment, consumers, farmers, inflation. The paper makes an in-depth and impartial assessment of the entire gamut of issues concerned with retail FDI. This study examines the prospects, potential benefits and loses along with the challenges emerging out of retail FDI in peculiar Indian background. Foreign direct investment in multi-brand retail will most likely give impetus to a better integration of Indian economy with the global markets. Better linkages between demand and supply have the potential to improve the price signals that farmers receive and also serve to enhance agricultural output and exports. Nevertheless it is unlikely that all the economic benefits and costs will be realized to their fullest extent, at least in the foreseeable future.