...FDI IN RETAIL: BENEFICIAL OR DETRIMENTAL AND IT’S FUTURE AFFECT ON INDIAN ECONOMY BY HARJOT KAUR PARMAR (UGC NET, MBA, PGDM, BBA,) ABSTRACT FDI is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor. Regardless of today’s crisis, India is considered as one of the most superlative place by foreign investors because of its increasing young population and rising disposable income among the middle class society, that is why large corporations like walmart are showing keen interest in initiating there retail operations in India. But mass round of discussions and debate has started after Government decision on 14 September 2012 allowing FDI in aviation up to 49%, in the broadcast sector up to 74%, in multi-brand retail up to 51% and in single-brand retail up to 100% with high level of disagreement and resistance from the opposition who believe that entry of Big Corporations in retail sector will badly effect the crores of retail shopkeepers and vendors resulting in depart of kirana stores, Whereas government is in favor and believe that it will generate large scale of employment, benefit both farmers as well as consumers and will help in reducing inflation. This research paper aim is to find why foreign investors are attracted towards India, find arguments in favor and against of FDI and what will be its effect on Indian economy in future, whether FDI will be favorable...
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...Foreign Direct Investment (FDI) as a strategic component of investment is needed by India for its sustained economic growth and development through creation of jobs, expansion of existing manufacturing industries, short and long term project in the field of healthcare, education, research and development (R & D) etc. After independence in India, FDI gained attention of the policy makers for acquiring advanced technology and to mobilize foreign exchange resources. In order to boost the FDI inflows in the country Indian government allowing frequent equity participation to foreign enterprises apart from provides many incentives such as tax concessions, simplification of licensing procedures and de-reserving some industries like drugs, fertilizers, aluminum etc. The first Prime Minister of India pointed out the importance of FDI not just as a source of capital, but for the host of technological and industrial knowledge it would bring with it. India laid out and started following a strategy of import substituting industrialization in the framework of development planning with a focus on encouraging and improving local capability, mostly in heavy industry and machine manufacturing sectors. To compensate for the general limited availability of technology, skills, entrepreneurship, bringing in FDI was one of the top priorities. The 1970s brought in more restrictions. FDI was only allowed in a selected group of core or high priority industries. The Foreign Exchange Regulation...
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...STUDIES Theme: - “Issues and Challenges in Retail Sector and Foreign Direct Investment India and across the World” FDI AND RETAIL TOGETHER: An Overview By Rakesh Soni (11bbl114@nirmauni.ac.in) PH. NO- 8690976530 Peeyush Purohit (11bbl091@nirmauni.ac.in) PH. NO- 7597907007 INSTITUTE OF LAW NIRMA UNIVERSITY AHMEDABAD INTRODUCTION INDIAN RETAIL MARKET Retailing can be defined as a business activity, which offers products or services in small quantities to ultimate consumers, at a place where consumers prefer to buy. India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million. Around 70 per cent of the total households in India (188 million) reside in the rural areas, where mostly traditional retail outlets, commonly called “kirana” stores exist. These are unorganized, operated by single person and runs on the basis of consumer familiarity with the owner. However, recently organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. India’s growing retail boom is a success story. With strong fundamentals developing in the Indian economy in the liberalized environment since 1991 with changes in income levels, lifestyles, taste & habits of consumers with preference for...
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...of more than 4 years in commerce and management. He has four papers to his credit out of which one has been published in South Asian Journal of Marketing and Management Research (SAARJ). He has also attended five seminars and one workshop. His area of interest is Finance and Marketing. Electronic copy available at: http://ssrn.com/abstract=2163952 Title of the page: Foreign Direct Investment in Retail India: Good or Bad? Abstract: Indian retail industry is a sunrise sector and many global players are willing to enter this. Indian retail industry is one of the pillars of the Indian Economy. Since 1991, when the policy of the liberalization was introduced by the Indian Government, FDI has been a highly controversial issue. From the last 3-4 years our Government is talking about the FDI in retail sector as there are some growth drivers for this sector. But, if the Government decides to open up the doors for FDI in this sector then some consequences will be there. No doubt that FDI plays a very important role in the development of any economy but this...
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...Current Economic Relationship of Canada and India Even with the opportunities afforded by an average annual growth rate of approximately 8 percent in India, Canada is not well represented in this expanding economy. Currently, India represents less than 0.5 percent of Canadian exports and less than 1 percent of Canadian imports (Foreign Affairs and International Trade Canada). Moreover, India, as a destination, represents less than half a percent of Canada’s total FDI outflows. It should be noted however that services are notoriously difficult to measure and that these statistics may not be truly representative of Canada’s involvement in the India economy. The Asia-Pacific Foundation of Canada (APFC) estimated in 2002 that Canadian firms sold $336 million in commercial services to the Indian market, which is about 2.5 times greater than the value reported by Statistics Canada. Also, in a limited sample of 43 Canadian companies, the APFC reported that investment into India from Canadian firms represented $284 million, which is about twice Statistics Canada’s reported value. The discrepancy in these statistics could be due to investment originating from Canada flowing through a third-party country prior to entering India and to the difficulty in reporting the trade in services. An example of this would be the case of Mauritius, which recorded 12 times more investment in India as Canada. However, the majority of investment originating from...
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...direct investment (FDI). As neoliberal idea is dominating the contemporary world, many developing societies have also sought to achieve comparative advantages through policies and legislations rooted in neoliberal ideology, rather than escalating the growth rate by absorbing technological knowhow. Many of them, in this course, liberalized their economy. However, very few of them have been able to attract FDI significantly. Countries which have less liberalized policy in neo-classical terms, namely, China, India and Brazil have received 50 per cent of FDI flows to the developing world as a whole.” (Murshed, 2003: 40). Although the neoclassical assumption is that FDI flows to developing world to seek comparative advantage due to cheap labour, a International Labour Organization (ILO) study shows that 55.5% of FDI occurred within developed countries and only 38% went to the developing ones (Ghose, 2000: 41). And, China alone took 33% of FDI shares flowing towards developing countries. To add this trend, Palley has aptly remarked that firms intentionally redirected their investments to take advantage of undemocratic conditions (Palley, 2004: 25). Against this trend, it would be appropriate and interesting to review Nepali ventures with FDI. This article is a modest attempt to analyze the idea and experience of Nepal on FDI front so as to explore some policy feedback. Mostly, the developing countries have problems on adopting an ideal while attracting FDI strategically. The...
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... 150 CAGR: 14.7% 110 100 Favourable demographics and rise in income level to boost FMCG market 50 37 0 2012 2020 2012 2020 Overall FMCG market expected to increase at a CAGR of 14.7 per cent to USD110.4 billion during 2012–20 150 CAGR: 17.7% 100 Rise in rural consumption to drive the FMCG market 50 12 0 2012 2025 2012 Total consumption expenditure set to increase 100 4000 3000 2000 1000 0 2025 CAGR: 13.3% 3600 1328 2012 2012 2020 2020 The rural FMCG market expected to increase at a CAGR of 17.7 per cent to USD100 billion during 2012–25 The overall rural FMCG consumption continues to grow at 12.5 per cent during 2013-14 Total consumption expenditure to reach nearly USD3,600 billion by 2020 from USD1,328 billion in 2012 Source: World Bank, Emami Reports, Dabur Reports, AC Nielsen, McKinsey Global Institute (MGI) titled The Bird of Gold, Booz & Company, Aranca Research India’s working population to be more than double the total population of the US (361.6 million) by 2030 950 900 850 800 750 700 CAGR: 0.8% 780 2011 2030 2011 200 267 100 0 2011 800 600 400 200 0 Working population (aged between 15 and 64 years) estimated to increase from 780 million in 2011 to 900 million by 2030 160 2016 2011 Rural India’s per capita disposable income set to increase 2030 CAGR: 10...
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...Advantages Government Regulations and Support Key Domestic & Foreign Players Future outlook Contact For Information A report by KPMG for IBEF 2 4 9 12 13 17 18 Market Overview The metal industry is a key sector in the Indian economy as it meets the requirements of a wide range of important industries such as engineering, electrical and electronics, infrastructure, automobile and automobile components, packaging etc. The metal industry consists of two major groups: ferrous metals and non-ferrous metals. Non-ferrous metals, which include aluminium, copper, zinc, lead, nickel and tin, are used to make alloys, castings, forgings, extrusions, wires, cables, pipes, etc., and find their application in a number of sectors such as agriculture, infrastructure facilities like power plants, automobiles, railways, telecommunications, building and construction and in engineering and chemical plants. There are significant reserves of non-ferrous metal ores in India. India is rich in bauxite (aluminium ore) and has grades of zinc, lead and copper reserves. Copper, lead and zinc are also imported as scrap or concentrates to be processed by secondary/custom smelters. Nickel and tin are also imported by India. Ferrous metals primarily consist of iron and different varieties of steel. Indian steel industry has shown strong performance in the recent past in terms of production, capacity utilisation, exports and consumption. India is now a major competitor among steel producers in the world. The sSteel...
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...Marketing in FMCG Sector 2014 Submitted by: Mohit Shrivastava - 47 Abstract This study deals gives an overview of the FMCG sector. What products constitute as fast moving, market size and government initiatives undertaken to promote this sector. It will also cover the aspects of a product that draws a customer towards a particular product. In addition, it will cover the road ahead (growth opportunities) in this sector. Introduction India has been a consumption-driven economy for the last many decades. Consumer spending in the country is expected to increase about 2.5 times by 2025. Broadly categorized into urban and rural markets, the Indian consumer segment is gaining high attention and pampering from marketers across the globe. Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) is a product that is sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, Over-the-counter drugs, toys, processed foods and many other consumables. Malviya, S. (2014), The Economic Times Marketing of FMCGs (Fast Moving Consumer Goods) plays a pivotal role in the growth and development of a country irrespective of the size, population and the concepts which are so interlinked that, in the absence of one, the other virtually cannot survive. It is a fact that the development of FMCG marketing has always kept pace with the economic growth of the country. Both have experienced evolutionary changes rather...
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...Threatening Business in Albania 1. Domestic Political Situation 2. Inflation /Taxes & Price Effects 3. Population and Business Distribution Geography 4. The Immigration and its Impact on the Economy and Business Demand 5. Global crisis – Greek & Italian Crisis 4. Conclusions 5. Literature Abstract This paper provides an overall picture of the business environment difficulties of East European Countries, through the concrete case of Albania, towards new political & economic changes in parallel with global changes. It will consider the type of businesses operating within the country, the market environment fragility & volatility, several types of risks present, the impact of Euro versus domestic businesses and joint ventures within Albanian market and the most evident barriers that domestic business has in order to act internationally. Introduction Change in Eastern Europe, in early 1990’s, came in with a new set of political and economical problems. In Albania, the collapse of communism and its agricultural closed economy left the place to the free market economy. The passage faced the institutional gaps as well as it found an unprepared society towards the mixed market economy. The old industrial sectors was paralysed, the unemployment rate and the...
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...TABLE OF CONTENTS LIST OF ABBREVIATIONS 3 INTRODUCTION 5 OUTWARD FDI 6 INWARD FDI 7 IMPORTANCE OF FDI 8 OVERVIEW OF MAURITIAN ECONOMIC PERFORMANCE 9 BOARD OF INVESTMENT 10 INCENTIVES ADOPTED BY THE GOVERNMENT OF MAURITIUS TO PROMOTE FDI 10 INVESTMENT POLICIES 10 1. LEGISLATION 11 Law Practitioners Act 12 Companies Act 12 Public Procurement Act 13 Competition Act 13 Trade and Investment Framework Agreement 13 Employments Rights Act and Employment Relations Act 14 Financial Services Act 14 Securities Act 14 Insolvency Act 14 Other investment incentives 15 TRIPS Agreement 15 2. Fiscal policy 16 3. LIBERALISATIONAND DIVERSIFICATION 17 4. MACROECONOMIC STABILITY 19 Social and political stability 19 Exchange Control 20 Inflation control 20 5. FINANCIAL SERVICES 20 6. INVESTMENT FACILITATION 26 7. LABOUR MARKET REFORM 27 8. INFRASTRUCTURE 27 Transport 28 Telecommunication network 28 Building Premises 29 TOP SECTORS ATTRACTING FDI IN MAURITIUS 30 FINANCIAL HUB 31 REAL ESTATE ACTIVITY 31 INFORMATION TECHNOLOGY AND OUTSOURCING SERVICES 32 MANUFACTURING SECTOR 33 SEAFOODS HUB 34 TOURISM SECTOR 35 THE TWO RECENTLY SECTORS WHICH ARE EXPECTED TO GROW AND DEVELOP: 36 KNOWLEDGE HUB 36 MEDICAL 37 FDI EVOLUTION MAURITIUS 38 SPECIAL CONSTRAINTS AND CHALLENGES 41 SUCCESSES AND CHALLENGES 42 THE ECONOMIC FUTURE OF MAURITIUS 43 ...
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...an rupee AN ASSIGNMENT ON FLUCTUATIONS IN INDIAN CURRENCY AND ITS IMPACTS SUBMITTED TO: Professor Harshit Shah SUBMITTED BY: Amber A Maheshwari (NR12070) SUBMITTED ON: 19th September 2013 INTRODUCTION TO EXCHANGE RATE MECHANISM: All economies that interact with international economy can be broadly classified into three categories on the basis of exchange rate policy of the country. 1) FIXED EXCHANGE RATE: These economies peg the value of their currency with some other prominent currency like US dollar. This system is simple and provides stability to the economy (of course, if the economy of the country to whose currency its currency is pegged is stable). This type of exchange rate regime is maintained by generally smaller economies like Nepal and Bhutan (pegged to Indian Rupee) or several African nations. Rational behind such regime is that in case of small economy – if the exchange rate is market determined – the sudden influx or out flux of even relatively small amount of foreign capital will have large impact on exchange rate and cause instability to its economy. Notable exception is China which despite being large economy has its currency pegged to US dollar. 2) FLOATING (OR FREE) EXCHANGE RATE: Bigger and developed economies like US, UK, Japan etc generally let market determine their exchange rate. In such economy exchange rate is determined by demand and supply of the currency. For example consider exchange rate of US dollar versus Japanese Yen...
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...1 Attracting Foreign Direct Investment (FDI) to India Ramkishen S. Rajana, Sunil Rongalab and Ramya Ghoshc April 2008 --------------------------a) George Mason University, Virginia, USA. E-mail: rrajan1@gmu.edu . b) International Professional Services Organization, Hyderabad, India. E-mail: sunil.rongala@gmail.com c) Claremont Graduate University, California, USA. Email: ramya.ghosh@cgu.edu We thank Rajeev Ranjan Chaturvedy for useful research assistance. The usual disclaimer applies. 2 1. Introduction Economic policymakers in most countries go out of their way to attract foreign direct investment (FDI). A high level of FDI inflows is an affirmation of the economic policies that the policymakers have been implementing as well as a stamp of approval of the future economic health of that particular country. There is clearly an intense global competition for FDI. India, for its part, has set up the “India Brand Equity Foundation” to try and attract that elusive FDI dollar. According to UNCTAD (2007), India has emerged as the second most attractive destination for FDI after China and ahead of the US, Russia and Brazil. While India has experienced a marked rise in FDI inflows in the last few years (doubling from an average of US$5-6 billion the previous three years to around US$ 19 billion in 2006-07) (Figure 1), it still receives far less FDI flows than China or much smaller economies in Asia like Hong Kong and Singapore was ahead of India (Figure 2). Not...
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...MDI, Gurgaon Strategy Management - II Assessment of the changes in Indian industry environment and their impact in respect of the following sectors: a) Telecom b) Automobile c) Shipping ARPIT JAIN: 12P189 Indian Industries The Indian economy has survived the global downturn very well. It has posted one of the highest rates of economic growth in the world despite other major industrial giants lagging behind. At the end of 2009, the Indian economy was growing at 7% a year. The strongest growth was coming from the manufacturing and construction sector and the weakest section was agriculture. The drawback of such a rapid economic expansion is a rise in inflation. The economy of India is the eleventh largest economy in the world by nominal GDP. Post independence the country went into a fast paced economic growth which was further fuelled by the free market principles started in the 1990’s which welcomed foreign investments. It has been predicted by leading Economists around the world that by 2020, India will be among the leading economies of the world. Four key industrial economic sectors are identified in India. The primary sector, largely extract raw material and they are mining and farming industries. In the secondary sector, refining, construction, and manufacturing are included. The tertiary sector deals with services and distribution of manufactured goods. India's service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sector...
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...South Africa is the continent’s second-largest economy and comprises of more than 50 million consumers, a health and quality-conscious middle class, a fairly stable political climate and a sound, effective financial system (South Africa.info 2013). This positive environment seems to provide a solid foundation for Britannia Industries to expand its biscuit segment. However, it is important to conduct a more thorough and accurate analysis in order to have a better comprehension of the possible issues, opportunities and challenges that may occur upon entering the market. 3.3.1 The economic environment Since the 2008 global financial crisis, the South African economy has demonstrated uneven growth, with an average increase of above 2%. This is largely due to the effect of the global economy in addition to the country’s strong ties to advanced economies (Statistics South Africa n.a.). According to Schwab et al. (2013), South Africa was ranked as the 53rd most competitive country worldwide, overtaking Brazil to take second place among BRICS-countries. Regardless of some soft macro- economic indicators such as an extremely high unemployment rate (25.4%) and rising inflation (5.9%) (Trading Economics 2014), direct foreign investments (FDI) continue to flow into the county. As shown in Figure 1, South Africa is ranked as the 13thmost attractive FDI destination globally, coming ahead of Switzerland, Spain and Italy. This positive rating is a result of numerous successful large merger...
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