...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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...SYMBIOSIS CENTRE FOR MANAGEMENT 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...
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...MNC's Effect on Local Businesses in Retailing Sector (India) Contents Abstract 1 Introduction 2 Literature Review 2 Effect of MNC’s into Indian Retail Market 5 Advantages 5 Disadvantages 7 Hypothesis 8 Conceptual Model 8 Conclusion 10 References 10 Abstract Globalization paved the way for entrepreneurs to expand their wings beyond their respective counties. MNCs exploit the business opportunities in other countries based on the FDI policies in those countries. This has both advantages and disadvantages to the target country. The MNCs have their impact on the economy and people of countries in which they operate business. This paper focuses on the impact of MNCs on local businesses in retail sector in India. The report review existing literature which provides insights into FDI policies in India, the level of FDI allowed by Indian government with respect to single –brand and multi-brand foreign companies, the advantages, opportunities, risks, threats and disadvantages of allowing MNCs into retailing sector in India. Introduction Retailing is the business taking up by individuals or families in India. Generally mom and pop kind of businesses operate in retail sector. The retail sector has tremendous growth in India. Moreover retailing is a profitable business in India. Since India is the country with huge population, naturally it is the correct destination to foreign investors to get profits from the market. India has been traditionally depending...
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...Title: Foreign Direct Investment in Retail in India: Good or Bad? Name: Amit Rohilla*, Manoj Bansal** Official Address: *Department of Commerce, Gargi College (University of Delhi), Siri Fort Road, New Delhi-110049 ** Department of Commerce, R. K.S. D. (P. G.) College (E), (Kurukshetra University, Kurukshetra), Ambala Raod, Kaithal-136027 Email id: *rohilla_amit@yahoo.co.in; ** manoj.bansal.5686@facebook.com Phone/fax number of author(s): *+91-8860-82-8731; **+91-9812-39-4945 A brief biographical note of the author(s): Amit Rohilla [M. Com., MBA (Finance), M.Phil. (Finance)] is currently Assistant Professor of Commerce at the Gargi College, University of Delhi, Delhi. Earlier he has worked as a Lecturer in R.K.S.D. (P.G.) College, Kaithal (Haryana). He is an active researcher and a teacher with an experience 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...
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...Investing in the Indian market India, among the European investors, is believed to be a good investment despite political uncertainty, bureaucratic hassles, shortages of power and infrastructural deficiencies. India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. No company, of any size, aspiring to be a global player can, for long ignore this country which is expected to become one of the top three emerging economies worldwide. ------------------------------------------------- Quick Facts about India ------------------------------------------------- On a cumulative basis, the FDI equity inflows received by India stood at US$ 20.92 billion during April-December 2009, according to the latest data released by the Department of Industrial Policy and Promotion (DIPP). ------------------------------------------------- The Prime Minister's Economic Advisory Council (PMEAC) has pegged India's growth at 8.2 per cent for 2010-11 and 9 per cent in 2011-12, expecting the agriculture, industrial and services sectors to perform well through the next two years. ------------------------------------------------- India's industrial output grew at its fastest year-on-year pace in almost two decades at 16.8 per cent in December 2009, signalling a strong recovery. The manufacturing sector that constitutes around 80 per cent of industrial output, expanded by 18.5 per cent to set the pace of growth. ------------------------------------------------- ...
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...GDP The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people India's retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4% of the industry, and these were present only in large urban centers. India's retail and logistics industry employs about 40 million Indians. Until 2011, Indian central government denied foreign direct investment (FDI) in multibrand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process. In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple. The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus. In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100%...
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...GROWTH AND CHALLENGES OF RETAIL INDUSTRY IN INDIA: AN ANALYSIS SUNITA SIKRI & Ms. DIPTI WADHWA Assistant Professor M.L.N College Yamuna Nagar-Haryana ABSTRACT The Indian Retail Industry is the fifth largest in the world. Comprising of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially the retail industry in India was mostly unorganized, however with the change of taste and preferences of consumers, the Industry is getting more popular these days and getting organized as well. The Indian Retail Industry is expected to grow from US$330 billion in 2007 to US$640 billion by 2015. According to the 10th Annual Global Retail Development Index (GRDI) of A.T. Kearney, India is having a very strong growth fundamental base that’s why it’s the perfect time to enter into Indian Retail Market. Indian Retail Market accounts for 22% of country’s GDP and it contributes to 8% of the total employment. The total retail spending is estimated to double in the next five years. Of this, organized retail –currently growing at a CAGR of 22%- is estimated to be 21% of total expenditure. The unorganized retail sector is expected to grow at about 10% per annum with sales expected to rise from $309 billion in 2006-07 to $496 billion in 2011-12. This paper focused on changing face of Retail Industry, organized or unorganized retail industry, major players in retail industry and also highlights...
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...RETAIL FDI IN INDIA: A WIN-WIN MOVE Mukesh Pandey CABM GBPUAT Pantnagar Ques: Why do we need FDI in food retail? Ans: 1. Supply side constraints: The main driver for this policy of allowing FDI in retail seems to be the recognition that the Indian economy faces serious supply-side constraints, particularly in the food retail chains. 2. Lack of investment in logistics, cold chain transportation and warehousing: There has been lack of investments in the logistics of retail chains creating inefficiencies in the supply chain. 3. Huge food wastages: Currently, lack of adequate storage facilities causes heavy losses to farmers. As per industry estimates, 35-40% of fruit and vegetables and nearly 10% of food grains in India are wasted annually. Though FDI is permitted in cold chains to the extent of 100%, in the absence of FDI in front-end retail, investment flows into this sector have been insignificant. Thus, FDI in retail would help in addressing this issue with compulsory investment of 50% in back-end. 4. Consumer benefit: With entry of foreign retailers, consumers will experience more variety of products, with improved quality at lower prices. Foreign 'low-cost' big players will adopt an integrated supply chain management system that, in turn, should help lower prices of products, benefiting consumers at large. 5. Wider distribution channels: FMCG companies are expected to benefit too. This would be evident through the increased volume of sales due...
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...methodology 9 Analysis 11 Case study: Tata’s Croma 16 Findings 20 FDI in Retail in India 21 Growth drivers in India for retail sector 22 Discussion 23 FDI in INDIA SECTOR WISE 23 Conclusion 25 Bibliography 27 Introduction Foreign Direct Investment (FDI) is fund flow (inflow/outflow) between the countries wherein one gains benefit from their investment whereas another can exploit the opportunity to enhance the productivity and find out better position through performance. Foreign Direct Investment (FDI) is the flow of funds between countries wherein one country reaps benefits from the investments and the other can make the most of the opportunity to improve the productivity and stabilize their position through performance. The Dictionary of Economics has defined FDI as investment in an overseas country through the acquisition of a company there of an operation on a new site. In other words, the capital inflows from abroad that is invested in to improve the production capability of the economy. Two forms of FDI: * Inward FDI * Outward FDI FDI is an important factor for growth and development in both developed and developing countries. FDI has seen a spectacular growth in the last two decades globally. Policies are formulated in order to accelerate inward flows. FDI provides good opportunities and benefits for both the host and home countries in terms of investments. The “home” countries benefit from the markets opened by industrial growth and...
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...FDI in India’s retail sector: Is it win-win game? By: Sharad Pandey Foreign Direct Investment (FDI) is defined as cross-border investment, where investment is made by a foreign country or organization in another country’s domestic market. The issue of FDI has been a debatable topic in India for years now, since government started promoting it. But is it really going to help the Indian economy? Yes, it will, as it will help farmers. In fact, farmers are not the only ones who will benefit from it, society as a whole will be a beneficiary. For the past few years opposition governments have, and are still opposing FDI in India’s retail sector. Watching political parties switch position on the issue of FDI in the retail sector is a bit interesting, and a drama to watch. It is interesting to note that, when BJP was in power, they came up with the idea of allowing FDI in the retail sector, but was opposed by ”Congress'’, which was then serving as opposition political party. When Congress came to power few years ago, it wanted to adopt a policy of allowing FDI into India’s retail sector, but this policy has met stiff resistance from the BJP. The changing position of the Country’s top political parties suggests that both the parties know that FDI it is good for the country. Each political party wants the policy to be effectuated under its leadership so that most of the benefits...
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...INDIAN RETAIL INDUSTRY MANAGEMENT AND ITS EFFECTS ON THE ECONOMY SUBJECT: MANAGEMENT 360 RAHUL S MADAVA RAO NAVNEET SINGH RAWAT UDAI SAI NALAM MOUNIKA APARNA GUPTA - 131407 131431 131332 INDIAN RETAIL INDUSTRY MANAGEMENT AND ITS EFFECTS ON THE ECONOMY Contents INTRODUCTION ............................................................................................................................................. 2 Study plan ................................................................................................................................................. 2 Study objective.......................................................................................................................................... 2 LITERATURE REVIEW ..................................................................................................................................... 3 RETAIL INDUSTRY – INDIAN SCENARIO ......................................................................................................... 4 Segmentation ............................................................................................................................................ 4 IMPORTANCE OF MANAGEMENT IN RETAIL INDUSTRY ............................................................................... 6 Place .......................................................................................................................................................... 6 Supply chain...
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...ARKAPRABHA DEBNATH PGP/16/133 UMESH KUMAR (GL) PGP/16/174 CONTENTS 1. | Introduction | 3 | 2. | Research Questions | 3 | 3. | Research Methodology | 4 | 4. | Literature Review | 4 | 5. | Conclusion | 14 | 6. | Tables | 15 | | | | | | | Introduction FDI refers to direct investment in business or production in a country by a foreign company. It leads to capital inflows from abroad into the production capacity of an economy, and facilitates international trade and knowledge transfer. It is a source of employment and capital which results in country's development. It improves the foreign exchange, helps transfer new technologies, increases competition, exports and tax revenues. It benefits the recipient country's business in terms of management, revenue generation by following the best practices which are of global standards. The policies related to FDI underwent major change in 1991 as a part of structural adjustment program. Since 1991, gradual liberalization of India's economy has led to more and more FDI into the country. India is gradually opening up sectors for foreign firms to enter with the recent decisions like removing investment caps in sectors like defense, telecom and insurance. There has been constant opposition to FDI on various grounds like protection of indigenous players, unemployment etc. India, one...
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...Case Discussion Questions 1. Why is the Indian retail industry so inviting? Indian retail industry is so inviting because it is a developing site for global retailers and the profitability is declining in developed countries. Because of the indulgence of many small organizations, its existing retail system has been divided into various parts and this division is beneficial such as it is leading to lower prices of farmers and higher prices of the consumers. Furthermore, in order to maximize return on investment, the new rules of India for international trade are attractive for FDI across nations(Dey, 2007). 2. From a resource-based view, what are the unique resources and capabilities that multinational retailers such as Wal-Mart can bring to India? In India FDI on multi brand stores has been forbidden in 2011. But by considering today, multinational retailers can bring small trade stores, modern technology, new opportunities for labor, supermarkets of food service and global sourcing stores in order to enhance the size of economy. 3. From an institution-based view, why is the opening of this industry to FDI such a political issue? In India, a large of small organizations are working and surviving currently even with political issues and potential organizations who want to work there are losing in order to prevent them from influence of politics because they do not know what could be unfavorable for them. 4. ON ETHICS: If you were an elected government official...
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...awareness and brand consciousness among people across different socio-economic classes in India and how the urban and semi-urban retail markets are witnessing significant growth. It explores the role of the Government of India in the industry�s growth and the need for further reforms. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. The paper includes growth of retail sector in India, strategies, strength and opportunities of retail stores, retail format in India, recent trends, and opportunities and challenges. This paper concludes with the likely impact of the entry of global players into the Indian retailing industry. It also highlights the challenges faced by the industry in near future. INTRODUCTION The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country�s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has...
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...P age |1 Summer Internship Project “Scope of investment in Real Estate in India & Real State investment: A case study of Jaipur region” Submitted in partial fulfillment of PGDM program 2011-13 Submitted by: Harshit Jain 19/093 Corporate Mentor Mr Shantanu Mehra ( Channel Retail Sales Head) Faculty Mentor Mrs. Monica Arora (Assistant Professor) Apeejay School of Management New Delhi July 2012 SIP Project Report BY: Harshit Jain(harshitjain.asm@gmail.com) | 1 P age |2 CERTIFICATE This is to certify that the project work done on” Scope of investment in Real Estate in India & Real State investment: A case study of Jaipur region ” Submitted to Apeejay School of Management, Dwarka by Harshit Jain in partial fulfillment of the requirement for the award of PG Diploma in Business Management, is a bonafide work carried out by him/her under my supervision and guidance. This work has not been submitted anywhere else for any other degree/diploma. The original work was carried out during 14th may 2012 to 5th june 2012 in Customer First Concepts , Pvt. Ltd.( Currently working as a Marketing division of various townships in Jaipur region ). Date: Seal/Stamp of the Organization Name of the faculty Mentor SIP Project Report BY: Harshit Jain(harshitjain.asm@gmail.com) | 2 P age |3 Acknowledgements This summer internship project would not have been possible without the support of many people . I wish to express my sincere gratitude to my Faculty Mentor...
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