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Foreign Direct Investment and Retailing in India: Opportunities and Challenges

Author

Listed:
  • Desti Kannaiah
  • A. Vinayagamoorthy

Abstract

India being second most-populous country has immense scope for retail expansion as along with time urbanization and consumerism has also been increasing. Initially India was conservative regarding FDI; it imposed restriction on foreign companies to limit their share in equity capital of their Indian subsidiaries but over the time Government of India gradually liberalized foreign investment in various sectors. Recently in 2011 India permitted 100% FDI in single brand retail and in 2012, 51% FDI permitted in multi brand. Even though organized retail sector in India is at the infant stage, India has today become a budding target for FDI. India today offers the most persuasive investment opportunity for mass merchants and food retailers looking to expand overseas as Indian economy is growing at a rapid pace with consumers having high purchasing power. FDI is a sturdy source for the intensification of retailing and will create enormous opportunities for innovation in retail sector in India but at the same time it is quite likely that a section of the domestic retailing industry will be severely hurt due to the entry of foreign retailers. In this paper researchers have tried to accentuate both the thoughts in detail and concluded the most constructive view on Opportunities and Challenges of FDI in Indian Retailing.

Suggested Citation

  • Desti Kannaiah & A. Vinayagamoorthy, 2016. "Foreign Direct Investment and Retailing in India: Opportunities and Challenges," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(12), pages 216-223, December.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:12:p:216-223
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    References listed on IDEAS

    as
    1. Anusha Chari & T. C. A. Madhav Raghavan, 2012. "Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges," The World Economy, Wiley Blackwell, vol. 35(1), pages 79-90, January.
    2. Namita Rajput & Subodh Kesharwani & Akanksha Khanna, 2012. "FDI and Indian Retail Sector: An Analysis," Journal of Business Administration Research, Journal of Business Administration Research, Sciedu Press, vol. 1(1), pages 53-64, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Foreign Direct Investment (FDI); retail sector; India; single & multi-brand retail;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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