Foreign Direct Investment in Retail: Bane or Boon

6 Pages Posted: 10 Jul 2006

Date Written: June 2006


With Government very well putting the cap on Privatization & Disinvestment, foreign direct investment in trade has developed into the fresh theatre of war flanked by the pro-reform and anti-reform lobbies. Foreign investors are tremendously enthusiastic on charisma in India's retail sector. AT Kearney's 2005 Global Retail Development Index has termed India The most compelling opportunity for retailers. There's sufficient reasons cited for this: the country is becoming richer, close to a quarter of the population is in the 20-34 age group in demand by marketers, and punter expenditure is anticipated to pick up in a major way. Both sides have been taking extreme positions. Those rooting for FDI assure overall opulence if it is permitted. Undeniably, FDI in retail is emerging as a sort of litmus trial to the government's pledge to liberalization, with Prime Minister also supporting advancement on this front. On the other hand, those divergent on the pitch claim it will mop away corner shops in every locality, chuck inhabitants out of jobs & bring unthinkable melancholy.

This article develop an insight as to what are the trends in Indian Retail Industry, benefits and drawbacks of FDI in Retail, whether it will be beneficial for economy and finally the challenges in Indian Retailing.

Keywords: Retail, FDI

JEL Classification: F21, L81

Suggested Citation

Chauhan, Sarita, Foreign Direct Investment in Retail: Bane or Boon (June 2006). Available at SSRN: or

Sarita Chauhan (Contact Author)

Self ( email )

Sector - 11

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