Amity Business School

Amity Business School

NTCC (IRS) Viva

Student Name: Vagisha Jaitly
Enrollment No: A0101919098
Programme Name: MBA (G)
Class of 2021
1
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An empirical study of FDI on

retail sector in India
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Reason for Selecting this Topic

 The topic is picked in order to grab more knowledge about Foreign Direct
Investment. Since FDI is a vast topic to have a study on, it has been narrowed
down to Retail sector. Global organizations are willing to invest in retail sector in
India due to the following reasons:
• Cheap labour
• Efficient and effective resources
• Unexplored markets.
 The next main reason for choosing the topic because it is beneficial for me in
future. In case, I go in a business line, the study will be a good guide in future.
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Objectives of The Study

1. To explore the trends of FDI in Indian retail sector.
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2. To examine the structure and opportunity of FDI in the

retail sector

ORGANISED UNORGANISED
RETAILING RETAILING
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3. To analyse the impacts of FDI in Indian retail sector.

POSITIVE NEGATIVE
Employment
opportunities Shut down of kirana stores

Economic Exploitation of natural

Growth resources

Advantage to
consumers
Create Unemployment
SMEs are also
benefitted
Absence of Infrastructure
Profit to Governments
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4. To analyse the need for FDI in single brand retail and

multi brand in India
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5. To identify the major challenges of FDI in retail sector.

1. Supply chain

2. Location and rental

3. Channel conflict

4. Regulatory

5. Unique Indian customer

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Review of Literature Form

Author Name
Topic Methodology Key Findings
with Year

• More of shopping malls are evolving.

A Study on the The data is being • Development of infrastructure.
Role of Foreign collected through • Expansion of business activities.
Direct various secondary • Penetration of modern retailing formats.
J. Pavithra (2012)
Investment in sources such as: • Growth in supply chain infrastructure.
Retail industry in News Papers & • Product diversification in all segments.
India Resources from internet • Stringent laws on FDI in retail
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Author Name
Topic Methodology Key Findings
with Year

1. FDI should be initially allowed in less

sensitive sectors and also in the sectors
wherein the domestic companies are
established strongly.
2. A National Commission should be set up to
The Opportunities The data is being
 Rajib study the problems of the retail sector which
and Challenges of collected through
Bhattacharyya should also evolve a clear set of
FDI in Retail in various case studies
(2012) conditionality on foreign retailers on
India
procurement of farm produce, domestically
manufactured merchandise and imported
goods. This conditionality must state
minimum space, size and other details like
construction and storage standards

Author Name
Topic Methodology
with Year
The major part of this
research paper is based on
secondary sources of data.
The data has been collected
by using various Economic
Surveys of India and
Department of Industrial
Policy & Promotion which
is functioned under Ministry
Foreign Direct of Commerce &Industry,
Investment and articles, journals,
 Jitendra Singh newspapers, RBI bulletin
Indian Retail
Naruka (2014)
Sector-Aspects of etc. In order to observe the
Indian Economy perception of the small
retailer about FDI policy,
there is a properly structure
survey questionnaire. This 4.
survey was done on 50
small retail outlets
(turnover-10-20 lakhs) in
Jaipur city of Rajasthan
using convenient sampling
method.
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Key Findings
1. The small retailers (unorganized sector)
should bring some change in their
appearance, affairs and attitude. These
small retailers can form consortium and
make bulk purchase. This will lower
down their cost of purchase.
2. Every state should set a monitoring
committee to keep watch on the
operations of foreign retailers. This
committee should ensure that proper
investments are made by the foreign
entities in the area of transportation &
logistics and cold storage.
3. The Government should improve the
basic infrastructure of the country so that
it can attract the foreign investors.
The Foreign Direct Investment policy
shouldbe done in a well phased manner
so that the all affected stakeholders can
adjust easily.
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Author Name
Topic Methodology Key Findings
with Year

1) Entry of foreign players must be gradual

with social safeguards so that the effects of
labour dislocation can be minimized.
The study is descriptive
2) Adequate attention should be paid to
in nature. The study
procuring, staff recruitment, investments in
A Study On primarily includes
warehouse, cold storage.
 Rekha Sharma, Impact Of secondary data which
3) Infrastructure, competition and retail formats
Jyoti Bansal Foreign Direct has been taken from
so that not only does the money comes in but
(2015) Investment In different literature
also it's a win situation for the current national
Retail Sector review, case studies,
retailer as well as “mom and pop” stores who
journals, newspapers
account for 70% of the retail business even
and online databases.
after the arrival of national retailers from the
corporate giants like the Tata, Reliance, Future
Group and the Birla's.
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Author Name
Topic Methodology Key Findings
with Year
1) The major benefit of FDI is that it is both
supplementary and complimentary with regards
to local investment. FDI lets a company gain
better access to top class technology and
The study is descriptive supplementary funds. They are also exposed to
in nature. The study management practices in vogue around the world
IMPACT OF FDI primarily includes and also get the chance to become a part of the
 Dr. M.
WITH secondary data which global market system.
Sivakumar, L.
REFERENCE TO has been taken from 2) On the unorganized sector, the traditional
Joshua Paul
INDIAN RETAIL different literature players are said to get affected on account of
Moses (2016)
SECTOR review, case studies, opening of FDI in multi brand retail. Whereas
journals, newspapers those same kinds of retailers are surviving in US,
and online databases. France, etc. These players who are having close
relationship with the customers and know their
demand need to enhance the modern trend in
retail in order to survive.
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Author Name
Topic Methodology Key Findings
with Year

1. With growing awareness and attitudinal shift

of customers, it is suggested that it is time
for small retailers to spend time to revive
The study is based on the strategies required to attract customers
secondary data that are towards their retail stores.
 Jyotsana
FDI IN INDIAN collected from various 2. The small retailers must concentrate upon
Chawla, Rachna
RETAIL books, journals, research innovative concepts of retailing, spend time
Agrawal and
SECTOR: A papers, articles and on CRM practices, bring improvement in
Bhavna Sharma
REVIEW report of government SCM, use feedback facility, keep a track
(2016)
organizations. record of customers, provide quality
products, bring improvement in ambience
and most importantly provide a personal
touch to the services for attracting customers
towards their retail stores.
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Author Name
Topic Methodology Key Findings
with Year

The study is based on The key finding of the paper can be concluded
secondary data that are that allowing healthy FDI in the retail sector
Issues and collected from various would not only lead to a substantial surge in the
 Runumi Das Challenges of FDI books, journals, research country’s GDP and overall economic
(2017) in Indian Retail papers, articles and development, but would also help in integrating
Sector report of government the Indian retail market with that of the global
organizations. retail market in addition to providing not just
employment but a better playing employment.
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Research Methodology
The study is exploratory in nature. Exploratory research is portrayed as an
assessment used to look into a troublesome which isn't clearly described. For such
an assessment, an individual who is examining, starts with a general idea and
utilizations this investigation as a medium to perceive issues, that can be the
fixation for future research. This kind of assessment is done when the issue is at a
groundwork stage. It is every now and again suggested as grounded speculation
approach or interpretive research as it used to address tends to like what, why and
how.
The study primarily includes secondary data which has been taken from different:
• literature review,
• case studies,
• journals,
• newspapers
• search engine (Google)
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SWOT Analysis of FDI in retail sector

• Healthy competition • Absence of
• Job Opportunities Infrastructure
• Better Investment Opportunities • Industrial Status
• Smooth flow of Technology • High Rent
• Caters to High End
Weakness Customers
Strengths es

Opportunit
ies Threats
• Investment benefits
• Boosts healthy competition • Organized Retailers’
• Supply Chain improvement Authority
• Better technology and distribution • Create Unemployment
• Improvement in Customer Satisfaction • Real Estate increased
cost
• Biasedness of Culture
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Findings of The Study

1. The small retailers (unorganized sector) should bring some change in their
appearance, affairs and attitude. These small retailers can form consortium and
make bulk purchase. This will lower down their cost of purchase.
2. Entry of foreign players must be gradual with social safeguards so that the effects
of labour dislocation can be minimized.
3. Adequate attention should be paid to procuring, staff recruitment, investments in
warehouse, cold storage.
4. With growing awareness and attitudinal shift of customers, it is suggested that it is
time for small retailers to spend time to revive the strategies required to
attract customers towards their retail stores.
5. Infrastructure, competition and retail formats so that not only does the money
comes in but also it's a win situation for the current national retailer as well as
“mom and pop” stores who account for 70% of the retail business even after the
arrival of national retailers from the corporate giants like the Tata, Reliance, Future
Group and the Birla's.
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Suggestions & Recommendation

• There should be a slow passage of outside players is essential in order to secure the enthusiasm
of local retails in the nation. The remote players ought to be gradually permitted in metros.
• Tough strategies ought to detail and calibrated.
• Remote players ought to be permitted in an organized way.
• The legislature ought to define a solitary window framework to diminish complexities for
remote speculators.
• These customary Kirana stores should frame a consortium and make mass buys. This measure
will assist with obtaining the products at lower cost.
• There should be a monitoring agency established at the state level to keep watch on the
operations of foreign players in retail sector. This agency should see that necessary investment
is made by the foreign players in cold storages, transportation & logistics. It should also ensure
that the foreign player's required quota of goods from SME sector.
• The educational institutions ought to establish degree, recognition constrains in specifying the
executives where both the hypothetical and common parts of retail exchange are educated to the
competitors. The wholesalers will be influenced by the section of remote player and the
hierarchical residential players, since they will buy the merchandise straightforwardly for the
produces apportioning the need of wholesalers. Consequently, the wholesalers ought to likewise
go in together to make aggregate buys.
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Conclusion
• FDI in my opinion is bad for the country’s economy. As we are in the category of
developing country and to develop properly, we need to control the country’s economy
very carefully.
• If the percentage in FDI in retail sector (multi-brand) is increased then the investment in
India’s retail market will be from foreign investors and the profits are also drained to the
investors. And moreover, in INDIA, the retail sector mainly depends upon the
agricultural sectors and the producer and if FDI is increased then it is going to affect the
agricultural sector of the Country very badly and which will affect the country’s
economy.
• And if the percentage of FDI is increased to 100% in retail (both single and multi-brand)
sector then government will lose the control over this sector completely and then it
cannot help in controlling this sector with its rule and regulations as the whole retail
sector would be privatized.
• One of the most disadvantage of FDI in retail sector is that as we know that the retail
sector is one of the major employment provider and permitting FDI in this sector can
displace the unorganized sector and leading to loss of livelihood the most favouring
example is if wall mart entry in retail sector is allowed then it will kill the millions of
local shops and jobs.
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Scope of Further Research

• Since Government has allowed 51% FDI in multi brand retail and
increased FDI limit in single brand retail from 49% to 100%.
• 50% of the investment should be done in improving the back end
infrastructure.
• 30% of all raw materials have to be procured from the small and medium
enterprises. Permission to set retail stores only in cities with a minimum
population of 30 lakhs.
• In order to examine the growth of FDI inflows of selected retail sectors,
further study can be done.