FDI IN MULTIBRAND IN INDIA The Indian retail is a robust pillar of the economy with a 13% contribution to the GDP

and employs 6% of the nations workforce. According to India Brand Equity Foundation (IBEF), the Indian retail is valued at about US$ 450 billion, expected to grow by 10.2% in 2011-12. Of this, organised retail only forms 6.5% of the pie. Hence, there is enormous scope for expansion through infrastructure and investment support. Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand Indian retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets, to sell multiple products from different brands directly to Indian consumers. The opening of retail industry to global competition is expected to spur a retail rush to India. It has the potential to transform not only the retailing landscape but also the nation's ailing infrastructure. 20-09-2012-Amidst opposition from its own allies, government went ahead implementing its decision to allow FDI in multi-brand retail. Under the notification relating to FDI in multibrand retail, multinational companies can invest up to 51 per cent to open stores in 10 states and UTs which have so far agreed to implement the decision. The decision to allow Multibrand retailers to open stores rests with the state governments. India Inc hailed the governments decision to implement FDI in multi brand retail and voiced that it will give a strong message to investors that the government means business and stands firm on its initiatives. This decision is a right step and will go a long way in capital infusion and is expected to strengthen the farmers community. (FDI) in multi-brand retail clears the deck for multi-national chains such as Carrefour, Tesco and Walmart to set up shop in India, but with riders. Multi-brand retail, is expected to transform the retail landscape in a significant way:

Firstly, the organised players would bring in the much needed investment that would spur the further growth of the sector. This would be particularly important for sustenance of some of the domestic retailers that dont have the resources to ride out the storm during an economic slump such as the case with Vishal, Subhiksha and Koutons, which couldnt arrange for funds to sustain their growth. FDI in multi-brand retail would in no way endanger the jobs of people employed in the unorganised retail sector. On the contrary, it would lead to the creation of millions of jobs as massive infrastructure capabilities would be needed to cater to the changing lifestyle needs of the urban Indian who is keen on allocating the disposable income towards organised retailing in addition to the local kirana stores. These stores would be able to retain their importance owing to their unique characteristics of convenience, proximity and skills in retaining customers. Also, these would be more prominent in the Tier-II and Tier-III cities where the organised supermarkets would find it harder to establish themselves. The numerous intermediaries would be restricted and therefore, the farmers would get to enjoy a bigger share of the pie. It is expected to help tame stubbornly high inflation but is likely to be vehemently opposed by millions of small retailers, who see large foreign chains as a threat.