Role of foreign direct investment in organized retail in India- A comparison with China

To achieve a double digit growth figure Indian Government explored avenues for investment from various sources. The previous entrance routes for the foreign investors were through franchising, licensing, international joint ventures, subsidiaries and acquisitions and strategic alliances aimed mostly in Greenfield projects. These modes of entry were based on restrictive policies and had their share of costs and benefits. The hierarchical stages of entry in foreign markets paved the way for foreign direct investment. India also felt that the need of the hour is 100% foreign direct investment (FDI) which was extended to single brand retailing initially and recently introduced 51% FDI participation in multi brand retail. The paper focuses more on factors which influence foreign direct investment in organized retail, the impact of organized retail on stakeholders and comparison with FDI in organized retail in China. This is an exploratory study and will try to highlight the role of FDI in Organized retail.