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BySonam Lalwani

FDI can be defined as a cross border investment, where foreign assets are invested into the organizations of the domestic market excluding the investment in stock. It brings private funds from overseas into products or services. The domestic company in which foreign currency is invested is usually being controlled by the investing foreign company.

India is a retailers dream due to its large upwardly mobile population and impressive growth rate. With the domestic retail sector projected to grow exponentially in the coming years, India has consistently been rated as one of the most desirable destinations for global retailers across an array of surveys and market reports.

Liberalization of trade policy Loosening of barriers and restrictions to the foreign investment Another important reason is changing consumer pattern Growing urban population

The minimum FDI in any multi brand retail project should be of $100 million(Rs.450 crore)
State government can prohibit FDI in retail if they wish to

Stores can be set up only in cities with a population of at least one million
At least one-third of the sales should be made to small retailers

At least 30% of the sales should be made to small retailers, either directly or through wholesale units set up for this purpose
At least half of the FDI should be made in back-end infrastructure such as warehousing At 30% of the value of manufactured items procured should be sourced from small and medium enterprises

Will help in lowering Inflation and Food Prices Improve Distribution and Warehousing Technologies Employment Effects and Small Domestic Firms Beneficial to consumers

Threat to small retailers and farmers. Profit will go out of country.

The model of multi-brand supermarkets is hardly working nor is it sustainable.(consummerism and cheap products)
Unorganized sector will be affected very badly and it will result in a large lot of unemployed retailers.(karianas and small retailers).

The model of multi-brand supermarkets is hardly working nor is it sustainable . It involves massive supply chains ranging from remote corners of the globe encourages consumerism, cheap produce and planned obsolescence.
. Indian government still fears that if FDI is allowed in retail then unorganized sector will be affected very badly and it will result in a large lot of unemployed retailers youth which is employed in the supply chain.

Indias retail sector remains off-limits to large international chains especially in multi-brand retailing. A number of concerns have been raised about opening up the retail sector to FDI in India.

The potential impact of large foreign firms on employment .

Opening up FDI would lead to unfair competition and ultimately result in large-scale exit of incumbent domestic retailers, especially the small family-owned business. A third concern raised by domestic incumbent firms in the organized retail sector is that this sector is under-developed and in a nascent stage.

It is also expected that technical know-how from foreign firms will lend itself to improving the supply chain in India, especially for agricultural produce.
Creating better linkages between demand and supply also has the potential to improve the price signals that farmers receive and also fraction of the final sales prices that is paid to farmers. An added benefit of improved distribution and warehousing channels may also come from enhanced exports