The retail industry in India is today transformed into a well developed retail hub. The Indian retailing scenario has a large number of small retailers on the one hand and a small number of large retail outlets on the other. Unorganized retail sector comprises 98 percent while the organized retail trade is only two percent of the total trade. Super markets and hyper markets fuel the growth of retail trade in India. Food and grocery items account for 76 percent of the total consumer expenditure in the country.
Foreign direct investment (FDI) in the retail sector in India is restricted. In 2006, the government eased retail policy for the first time, allowing up to 51 per cent FDI through the single brand retail route. Since then, there has been a steady increase in FDI in the retail sector; the current regulations on retail allow 100% FDI in wholesale cashand-carry trading. In single-brand retailing, 51% FDI is permitted while it is prohibited in multi brand retailing. The question arises whether opening up of FDI in multi-brand retail will create problems or provide opportunities. There is no clear answer and ample views have been expressed by that in favour and against FDI.
