Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges

12 Pages Posted: 17 Feb 2023

See all articles by Anusha Chari

Anusha Chari

University of North Carolina (UNC) at Chapel Hill - Department of Economics; National Bureau of Economic Research (NBER); University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School; Centre for Economic Policy Research (CEPR)

T.C.A. Madhav Raghavan

Indian Statistical Institute, New Delhi - Indian Statistical Institute

Date Written: March 11, 2011

Abstract

Despite encouraging signs, India’s retail market remains largely off-limits to large international retailers like Wal-Mart and Carrefour. Opposition to liberalizing FDI in this sector raises concerns about employment losses, unfair competition resulting in the large-scale exit of incumbent domestic retailers, and infant industry arguments to protect the organized domestic retail sector that is at a nascent stage. Based on international evidence, we suggest that allowing entry by large international retailers into the Indian market may help tackle inflation, especially in food prices. Moreover, technical know-how from foreign firms, such as warehousing technologies and distribution systems, can improve supply chain efficiency in India, in particular for agricultural produce. Better linkages between demand and supply have the potential to improve the price signals that farmers receive and also serve to enhance agricultural and other exports.

Keywords: Foreign Direct Investment, Liberalization, Retail, India

JEL Classification: F21, F23, L81

Suggested Citation

Chari, Anusha and Raghavan, T.C.A. Madhav, Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges (March 11, 2011). Available at SSRN: https://ssrn.com/abstract=4360265 or http://dx.doi.org/10.2139/ssrn.4360265

Anusha Chari (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

McColl Building
Chapel Hill, NC 27599-3490
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

T.C.A. Madhav Raghavan

Indian Statistical Institute, New Delhi - Indian Statistical Institute ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
17
Abstract Views
240
PlumX Metrics