FDI in retail in India

FDI in single brands & FDI in double brands http://www.moneylife.in/article/100-fdi-in-retail-in-india-good-or-bad/21733.html


http://business.mapsofindia.com/india-retail-industry/ this is for CAGR of the retail industry.




FDI in single brand retail (India allows 51 percent) (a) only single brand products would be sold (i.e., retail of goods of multi-brand even if produced by the same manufacturer would not be allowed), (b) products should be sold under the same brand internationally, (c) single-brand product retail would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under “single-brand” would require fresh approval from the government. The Government has not categorically defined the meaning of “Single Brand” anywhere neither in any of its circulars nor any notifications. So when a company sets up shop here for a brand it cannot own more than 51% of the partnership[ Now, taking an example of a large departmental grocery chain, prima facie it appears that it would not be able to enter India. These chains would, typically, source products and, thereafter, brand it under their private labels. Since the regulations require the products to be branded at the manufacturing stage, this model may not work. The regulations appear to discourage ownlabel products and appear to be tilted heavily towards the foreign manufacturer brands LIMITATIONS of the present set-up – mentioned in this article. Successful examples include China and Thailand

Paper - FDI in Multi- brand Retail Trading: MSE Sector Need Level Playing Field

livelihood concerns, likely disturbance in existing supply chain scenario, impact on India’s micro and small enterprise (MSE) manufacturing sector as well as

However. (get data about the contribution of SME sector to retail from paavan) Local players. The analysis also suggests that in the next few years there will be major opportunities in India's smaller cities. This comprised 1. Hoarding. Indian traders and business communities might survive the competition. FDI inflows of nearly USD 1. KPMG report 2000 to March 2010. the report suggests.54 percent of the total FDI inflows received during the period1.retail trading enterprises . We are now part of the global market. Outline Overview of the retail industry in India Organized. have been estimated to be over Rs. unorganized – contribution to GDP.8 billion (INR 7. (Retail formats available in India – flow chart) Current FDI policy Single brand. – international players. and India too being part of that global market. vegetables and other perishables. especially of fruits.2 billion by 2014. the BMI India Retail Report forecasts that the total retail sales will grow from US$ 353 billion in 2010 to US$ 543. The Government’s role is to bring down the causality rate during the transition phase to the minimum. International players. 1 trillion per annum. particularly among MSE retailers. In the third-quarter report of 2010. Add improvements in the agricultural sector also…farmers know they can sell their produce for more.1 An important consideration. multi-brand. etc will decrease and inflation may also be controlled.799 crore) were received in the sector.the major economic enterprise-establishment constituent of the Indian economy Post-harvest losses of farm produce. there would be causalities initially. opening up of retail sector is imminent. 57 per cent of which is due to avoidable wastage To conclude. the will invest in technologies and agri production will increase. it can be said that in the context of free trade regime. how they enter . is the fast-growing middle and upper class consumer base.

China. Threat to self sufficiency in 5-10 years in food grain production Food grain shortage expected to range from 20-25% by 2025. Concluding remarks: Look at disadvantages to retail sector even if we allow 100% FDI – may not necessarily lead to developments we talk about.Justification for this policy – protecting the interests of the kiranas. . Government should have a structured way of opening it up. intermediaries dominate the profits Advantages of opening up the sector to FDI Opportunities available in India (AT Kearney study) Example of Thailand. etc Limitations of the policy Infrastructure lacking.

Sign up to vote on this title
UsefulNot useful