Report on FDI inRetail Industry in India

ABSTRACT

Foreign direct investment (FDI) plays an important role in the growth of India's dynamism. There are many examples of benefits of FDI in India. FDI in retail, the suppliers (farmers) benefit and improve by reducing transaction costs and transformation of enterprises through adoption of advanced supply chain and consumers. India is the second largest country, which have immense possibilities for expansion in the retail sector, as along with the time of urbanization and consumption also has an opposite tendency. Originally India conservative FDI on respect; imposed restrictions on foreign companies to limit their share of equity in their Indian subsidiaries, but gradually foreign investment in various sectors liberalized the Indian government over time. Recently in 2011 allowed India 100% FDI in single brand retail and in 2012, 51% FDI allowed in multi-brand. In this report, we analyze the impact of this decision on the various sectors such as food retailers, farmers, traditional and employment and food inflation. In this context, the present work makes an attempt, the potential impact of FDI on Indian retail, whether good or bad, to study opportunities and challenges. It analyzes the reasons why foreign retailers are interested in India and their prospects in India and learn the proposals for the future growth of the retail industry.

Introduction

FDI ( Foreign Direct Investment ) is a method that allows the inhabitants of a country to invest directly their funds in another country and acquire the ownership of assets and control of the investment in terms of production , management , distribution , effective decision-making, employment , etc. exercise . "FDI is to control an international financial power with the intension or involved in a foreign country in the management of a company."Retail sector is one of the largest carriers in the Indian economy and accounts for 15 percent of its GDP. The Indian retail market is estimated to be US $ 450 billion and one of the top ten retail markets of the economic value in the world. India is one of the fastest developing retail markets in the world, with 1.2 billion people. In simple terms, makes retail directly the final product to the end user of the product or a sale to the final disposal.The Indian retail industry is the fifth largest in the world, consisting of organized and unorganized sectors. Indian government continues to hold on the retail reforms for multi-brand stores.The impact of the entry of major retail chains on employment and established mom-and-pop stores is mixed. There may be significant benefits for consumers in terms of lower prices and reduced food price inflation. Moreover deal through improved distribution and storage technologies, large retail chains are able to provide a better price signals to farmers and to serve as a platform for increased exports.This paper discusses about the potential impact of FDI on Indian retail, whether good or bad, opportunities and challenges and also the contribution of FDI in retail in the economic growth of the country. It also explains the trends in FDI inflows in various emerging markets

REVIEW OF LITERATURE

The study showed that barely 1.7 per cent of small businesses have closed down from organized retail due to competition. You have successfully competed against organized retail by adopting better technology. FDI has positive spillover effects on the economy as his property benefits locally owned companies spread condition to increase their productivity. All these benefits of FDI were well proven in sectors such as automobiles, telecommunications and consumer electronics in India.

Foreign retailers work with small manufacturers for in-house labels and they offer technologies such as packaging technologies and barcodes. Sourcing from India has increased with the advent of foreign retailers and they also bring in an efficient supply chain management system. Joint ventures with foreign help retailers who get Indian industry access to finance and global best practices. In addition, a non-tradable service in retail, there is no possibility of improved efficiency through import competition and foreign investment is the way forward.

WHAT IS FDI?

If a company or organization (usually by the company and not the government of

that country) in other, their capital to invest in a country or company basis than

that. Of their host country it also involves the purchase or construction of fixed

assets in a foreign country, you are to use the degree of control over the

organization and performance of different functions. The example of such tangible

assets are investments and other income generating assets. Then that investment is

called foreign direct investment. Indirect investments are generally not included as

foreign investment, with market List of Nation shares which are invested by

foreign institutions, may the example of indirect investment portfolio flows (it is a

passive investment in securities such as public stocks or bonds in another country

or rather say it. as a purchase of securities of a country from other countries

nationals) As suggests the names of these institutions make direct investments can

access the power to control the companies in which they have invested up to a

significant extent. Stark regulated economies cannot attract foreign direct

investment, while the countries with a highly skilled workforce and open

economies attracts huge sum of foreign investments

There are a number of ways to invest in those companies to make their investments

in foreign companies and some ways as follows-

1. You can acquire the shares in a new country

2. You can merge or develop a joint venture with a company have, which is

established in another nation

3. You can open a subsidiary or franchisee adjust their business in a foreign

country.

OECD says that a company should have more than 10% of the voting shares. They

define it as a control using emerging voting rights to 10%, which is internationally

agreed, but the widespread companies usually have the control level small block of

shares, which is why it is a gray area. The control of technology, management and

other key inputs control over given.

Foreign direct investment is the transfer of ownership? No, even the transfer of

factors such as capital, technology, management and organizational skills, etc. are

also included, it is therefore not only is transfer of company property. In a narrow

sense, the building just include a new investment in foreign direct investment. FDI

is the sum of equity and long-term and short-term capital according to the balance

of payments. FDI is an example of international factor movements or currency

reserves.

FDI can also be taken in the form of green field entry or as a foreign takeover.

Green field entry when the concept in which the large companies, small parts and

all other elements of its products from the ground up for sample Honda do this

assemble manufactured in the UK.

The definition of FDI is not affected by the origin of the investment. Investments

can either way take place as inorganically by acquiring new companies in new

destination country or by the well-established business in the host country expands

in a new country that is organic.

Foreign acquisition is a term that is generally substituted with the known as

mergers and acquisitions term but the fact is that these two term are different, as in

the international market mergers are immensely small as they constitute less than

one percent of all foreign acquisitions.

Types of Foreign Direct Investment: An Overview

The FDI can basically be classified into three types, and they are according to the

activity and industry that companies do in a foreign country. Broad classifications

are outward and inward FDI. Classified by the restrictions imposed. If the FDI is

backed by the government against any danger is an outward FDI. This is subject to

tax incentives. "Direct investment abroad" is the term referred to as the coverage of

the domestic industry. The factors such as interest loans, tax breaks, subsidies and

restrictions removals are the factors that encourage inward FDI. The other type of

FDI given as underwritten: -

1. Horizontal

In this type companies are doing the same business, as they do in their home

country. Any foreign investment have their different motives. "Market-seeking

FDI" is the ability to search for new markets or strengthen the existing business

empire and when the companies to strengthen their productive capacity and to

explore new country, who as a better operational efficiency, what they have in their

home country, it is referred to as "resource FDIs such" and some companies invest

in order to optimize the available opportunity and economies of scale, they are

called "efficiency-seeking FDI". Example of horizontal FDI: “Toyota builds its

cars in both countries (Japan and the United Kingdom)”.

2. Vertical

In this type companies are working on different stages in different countries, but on

an equal division. It can be further classified assets on.

a. Forward vertical FDI is placed in firm contact with the market and with the

appropriate example to distribute of Toyota cars in America.

b. Backward vertical FDI, which is opposite, and is a backward shift such as

collecting or integrating Raw. For sample to acquire a land for the

production of tires or a rubber plantation from Toyota.

3. Conglomerate-

Established a whole new business in abroad, which is completely independent to

business of the host country. This is the most challenging and risky form of FDI

due to the two major challenges - new market, which in all together to new

country.

Retailing in IndiaRetailing in India is one of the pillars of the economy, accounting for approximately 22 percent of GDP. “The Indian retail market is estimated to be US of economic value in the world $ 500 billion and one of the top five retail markets. India is one of the fastest growing retail markets in the world, with 1.2 billion people.”

As of 2003 India's retail sector was substantially small shops manned owners. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were only available in large urban centers. “India's trade and logistics industry employs about 40 million Indians (3.3% of the Indian population).”

By 2011, denied Indian central government foreign direct investment (FDI) in multi-brand retail, prohibits foreign groups of each property in supermarkets, convenience stores or retail outlets. Even single-brand retail limited to 51% of the shares and a bureaucratic process.

In November 2011, the Indian central government Retailing announced reforms for both multi-brand stores and single-brand stores. “These market reforms paved the way for the retail innovation and competition with multi-brand retailers such as Wal-Mart, Carrefour and Tesco as well as individual brand majors like IKEA, Nike and Apple. The announcement sparked intense activism, both. In the opposition and in support of reforms In December 2011, under pressure from the opposition, Government of India laid the retail reforms on hold until it reaches a consensus.”

In January 2012, approved India reforms for single-brand stores anyone in the world welcomed in the Indian retail market with 100% ownership renew, but imposed a requirement that the single brand retailers source 30 percent of its goods from India. Indian government continues to hold on the retail reforms for multi-brand stores.

“In June 2012, announced IKEA had applied for permission to invest $ 1.9 billion in India and setting up 25 retail stores. One analyst of Fitch Group explained that the 30 per cent requirement was likely to delay significantly, if not most, single-brand Majors prevent from Europe, USA and Japan to open out of the shops and the creation of related jobs in India,”

On 14 September 2012, the Government of India announced the opening of FDI in multi-brand retail, subject to the approval of the individual states. This decision welcomed by economists [who?] And the markets, but caused protests and an upheaval in India's central political coalition structure of government. On 20 September 2012, the Government of India announced officially the FDI reforms for single and multi-brand retail in order to make it effective under Indian law.

On 7 December 2012, the Federal Government of India allowed 51% FDI in multi-brand retail in India. The government managed to obtain the approval of multi-brand retail in Parliament despite fierce tumult of the opposition (the NDA and Left parties). Allow some states, foreign supermarkets such as Walmart, Tesco and Carrefour, other states not to be opened during.

Advantages of FDI in retail

India's retail sector is one of the largest in the world when it privately owned ones comes to. The industry has become seen some major restructuring thanks to the FDI structure more liberal than before. The benefits of FDI in retail, as per experts, carry greater weight than the costs associated with impact.

With FDI in retail operations in the distribution and production cycles are expected to be better. By factors such as business transactions, the cost of production will also come down. This will mean a greater choice of products at lower and reasonable prices for customers.

As a result of FDI, the company can bring in the technology and skills from other countries and to help in the development of infrastructure in India. This will also help to create in better value for money for the buyer.

After FDI in retail, it is possible to establish a properly organized chain of retail stores as easily accessible to the capital. The investment may be considered provided not easily liquidated as long as one is physical capital in a domestic company. This is its main difference from equity.

ICRIER had also predicted that when FDI was introduced in retail trade during 2011-12 in India, the Indian economy grew by 13 percent, the sector could unoganised 10 growth was seen percent and the organized sector to 45 could have increased per cent.

Disadvantages of FDI in retail

Experts say that while analyzing the positives and drawbacks of FDI in retail, both the government and the opposition did not refer to the Parliament Committee report where its effects had been studied in great detail. The committee had taken into cognizance many witnesses, NGOs, individuals, and trade associations to come up with the said report. 

The Committee visited various corners of India and also went through reports and gathered knowledge about the experience of similar decisions in other countries. It also enquired from several government departments regarding the matter. 

The Committee had surmised in its report that the number of people getting jobs will be lesser than the amount of people losing the same as a substantial amount of marginal and small farmers will be wiped out. Some other problems expected out of this were aggressive pricing and prevalence of monopoly. 

As per the Committee's report almost 8 percent of India's workforce is employed in the unorganized retail sector. This comes up to roughly 40 million people. It has been stated that FDI in retail will generate 2 million jobs. However, the Committee had stated that it is not a proper indication as it does not take into account the number of people who already work in the retail sector. 

ICRIER had executed a second study on the effects of FDI in retail during 2011 and in that it had stated that FDI will bring about a fantastic shopping experience for the consumers. It had actually interviewed 300 people from the middle and high income groups. Thus, in effect, the efforts of the Parliament Committee were overlooked for a private organization. 

Experts have questioned the logic of ICRIER to question 300 people in a country with a 1.2 billion population and more than 40 per cent who can be termed as poor.

The Parliamentary Committee report on FDI was never discussed in Parliament itself, and as per experts, it is not a good sign as far as the democratic system in India is concerned. 

As per ICRIER, consumerism is positive for economic growth. In 2008 the first survey had dealt with 2020 small and unorganized retailers whereas the total count of such entities in India at that time was 6 million.

Leading economic experts from outside India have also posed the same question. They have also pointed at the labor practices of organizations such as Wal-Mart. Most of these are not exactly healthy for workers. This has also led them to ask if such processes were really required in India. 

It is being said that the lobby favoring FDI in retail in India has invested at least Rs 52 crore and experts opine this could have had a major say in the way things turned out.

Process of FDI in Retail 

There is no such method, the company shortlisted. International companies that are willing to invest a single or multi-brand retail in either, can put in their applications with the Department of Industrial Policy and Promotion. Here are the applications in an effort to checks to determine overestimated their suitability according to the guidelines. Subsequently, the Foreign Investment Promotion Board, Ministry of Finance will consider the requests before the final approval provides.

THE NEW GOVERNMENT EMPOSED CHANGES

The BJP-led central government, the previous UPA regime decision allows foreign retailers to open multi-brand stores has retained a 51 percent ownership, showing a consolidated document FDI policy released.

Multi-brand retail was opened to foreign direct investment, with a 51 percent cap in September 2012, when the Congress Party was led UPA government in power. The BJP had been in his manifesto for last year's general elections against this, but has not made any decisive change in policy since coming to power.

The Congress said it "rehabilitated" was, and it is now proven that the UPA government did everything. In the national interest "We are vindicated on FDI and on other decisions to liberalize FDI in other sectors in multi-brand retail," said the former trade minister Anand Sharma.

The BJP, which was then in the opposition "had asked, trying to bring down the government case our wisdom into question," he said. "Now wisdom has dawned on the BJP, but in the process, the uncertainty of two years, the investment in India has hurt them." The new 119-page Year FDI document details all existing policies and the changes one year made about the past of the government modes, including increasing the FDI cap in defense and insurance. From 26%, the boundary has migrated to 49%.

Amitabh Kant, secretary in the Department of Industrial Policy & Promotion (DIPP), said: "In the last eight to nine months, we opened every single aspect of the Indian economy, we have our defense sector opens up, construction, insurance, medical equipment. ... And other than multi-brand retail India is now the most open economy in the world. “The DIPP, which is part of the Ministry of Trade and Industry, is the nodal agency on FDI policy. Every year it provides all of India FDI regime into a single document in the context of policy, to make it simple and easy to understand for investors.

GROWTH OF INDIAN RETAIL

1. After the 8th annual Global Retail Development Index (GRDI) by AT Kearney, India retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 8-10% of GDP (Gross Domestic Product) of the country. In 2009 it increased to 12%, 22% in 2010 and is expected to reach 35% by 2011-12. 2. In 2011-12, more than 1,000 supermarkets and 3,000 supermarkets projected to come. India are additional sales area of 700 million sq ft need (65,000,000 m2) as compared to today. Current forecasts for the construction point to a supply of only 200 million sq ft (19 million m2), a gap of 500 million sq ft (46 million m2) leaving the filled, $ 15-18000000000 3. After ICRIER to have a price of US will report that retail business in India is estimated at 13% of $ 322 billion in 2006-07, growing to $ 590 billion in 2011-12. The unorganized retail sector is expected that per year with a turnover of about 10% grow from $ 309 billion in 2006-07 to $ 496 billion in 2011-12 expected to rise.

TRENDS OF FDI INFLOWS IN EMERGING MARKET ECONOMIES

The liberalization of trade, capital markets, breaking of business barriers, technological progress and the increasing internationalization of goods, services or ideas in the past two decades makes the world economy globalized. Consequently, with large domestic market, low labor costs, cheap and skilled labor, high return, developing countries now have a significant impact on the global economy, especially in the developed economies. Trends in flows world FDI show that the incorporation of a significant proportion felt the FDI inflows makes countries to develop their presence.

CURRENT PICTURE OF FDI IN RETAIL SECTOR

According to the announcement, FDI up to 51 per cent in retail - 1. Products to the following conditions should be covered only

2. Products are sold by a single brand, should be under the same are sold brand internationally 3. Single Brand Product Retailing would only apply to goods which are in the production of the brand. 4. FDI would be permitted only with the prior approval of the Government, to meet prescribed standards and conditions 5. The processing is done dept. The industrial policy and the promotion of government approval. The guidelines would, however, ensure that the food and grocery segment of the Indian retail industry is not competition of capital, as this sector would face in India tend to be multi-store units and multi-brands.

MAJOR CHALLENGES FOR RETAIL DEVELOPMENT IN INDIA

Organized retail in India is little more than a decade old. It is mainly an urban phenomenon and the pace of growth is still slow. Some of the reasons for this slow growth are: - The existence of traditional KIRANA transactions - The first and foremost challenge of organized retail in India faces competition from the unorganized sector. Retail is not a new concept for India; It has been established here for centuries. It is a low cost structure, in particular operated owner, has a negligible real estate and labor costs and to pay little or no taxes. Consumer familiarity that runs from generation to generation, is a great advantage for the traditional retail. On the other hand, the organized sector who have to meet large expenses and yet keep prices low enough to compete with the traditional sector. The lack of recognition as an industry - Lack of recognition as an industry hampered the availability of funds for the existing and new players. This affects the growth and expansion plans. High cost of real estate - real estate prices in some cities in India are among the highest in the world. Renting property is so high that it reduces the profitability of the project. High cost stamp Duties- stamp duty on the transfer of ownership are also very high, which varies as a Declaration 12.5% in Gujarat and 8% in Delhi by the state. The problem is compounded by problems with the clear title to the property, while the use of conversion time country is time consuming and complex as the legal process for settling property disputes. The lack of infrastructure-Poor roads and transport hampered the development of food and food retailing in India. The existing supermarkets and grocers have a significant amount of time and money to invest in the construction of a cold chain network. have many diverse and complex control system -The tax rates from state to state and organized retail players a more octroi with the

introduction of VAT (VAT) on to causing the error in the supply chain management. Price war is the price competition between the various retail organizations. Each and everyone says, offer goods at low cost and offers various support programs. In such a case, it is difficult to keep a customer with themselves.

Indian market has a high complexity with respect to a wide geographical spread and different consumer preferences by each region requires different needs for localization within the geographic zones. While India is a large market opportunity, the number and rising consumer purchasing power gifts are given, there are also significant challenges given that more than 90 percent of trade is carried out by independent local shops.Challenges are: Geographically dispersed population, small ticket sizes, complex distribution network, little use of IT systems, limits the mass media and the existence of counterfeit goods.

OPPORTUNITIES FOR RETAIL DEVELOPMENT IN INDIA

Retail Marketing gets different ways in the Indian market to grow. Not only in retail, but manufacturers and suppliers and buyers have lower number of ways, some of which are mentioned-Provides visibility organized retail with the customer to Brands- needed visibility brands and a platform for interaction provides. It also helps in the introduction of new products or product variant and market penetration. It has wider range of products and more frequent, faster delivery. Urbanization- as large percentage of population, retail marketing will grow more opportunities in the Indian market. Not only in the retail, advertising manufacturer Owls suppliers and buyers have different possibilities mentioned by the few companiesProvides visibility organized retail requires visibility brands and a platform for interaction with the customer Brands- dying provides. It also helps new products or product variants and market penetration in the introduction. It has wider range of products and more frequent, faster delivery. Urbanization- As large percentage of the population has now in die urban areas by increasing job opportunities and more facilities for your children and family moved Worden is, know that they die importance of brands and in addition you want everything under one roof, so a retail company has can to catch more customers. went nuclear family as time joint families came in a new form, the nuclear family. Also, the income levels of these nuclear families increased since scoring members earn Started. This in an increase the power of purchase and time are lacking. Now they want everything under one roof. This brought the concept of organized retail. Plastic Revolutions use of credit cards for retail marketing increases. It creates demand, even if it is not necessary.

Indian organized retail Consumers- pressure on the right infrastructure, as well preserved buildings, air conditioning, trained personnel, electronic machine, parking and correct display of the Category instance. Customers feel good to see all of them die purchase to check for them easier. You do not need to wait for everyone to see the products. SelfSelect saves you time and more opportunities and satisfaction. Fix costs eliminates risk of misleading die. Operate various discounts and promotional submitted by the manufacturers projects. You could also product from different grades and the right quality. High availability of jobs - it is in the country good employment opportunities to be (in crores), as it will open halls. The entry of modern retailers to offer the market is to expand large amount additional jobs in retail. Opportunities arise from the ordinary workers vary to specialized officials. are the employment opportunities are retail, retail manager, cold chain, warehousing and logistics. The contracts for urban and rural youth Will Office. There are huge amount of MBA be, as is know for its world-class chain of retailers to estimate work. Indian Farmers: The main advantages of FDI in retail is his dignity for farmers to get in a position to get a good return for their crops BY deliver by binding long-term contracts with them organized retailers die, they are not in a position in the local Mandi to die sale. The payments will be paid directly into bank accounts and his commission. The major retailers will even save 10-15% in commissions by buying directly fruits and vegetables. Reduced Supply Chain Management - The big players of retail marketing and die manufacturing companies to come into direct contact, to reduce as many intermediary chains. Manufacturers also many incentives for their product GIVE dies die for consumer benefit. Proper control: to die in order to increase tax revenue and service tax. The organized distribution with computerized billing system also takes more by commodity taxes as and Service Tax will die from the government resign. Would tax buoyancy of the economy to increase. Inflation control: inflation is curbed. Now in urban areas more employment opportunities and more facilities for their children and family is that they know due to postponed. The importance of brands and beyond all under one roof they want to make a single retail to catch more customers Nuclear Family- Over time common families came passed in a new form, the nuclear family is. Also increased the income of these nuclear families because both members began to earn. This leads to an increase in the performance of the purchase and the lack of time. Now they want everything under one roof. This brought the concept of organized retail. Plastic Revolutions use of credit cards for retail marketing increases. It creates request, even if it is not necessary.Indian organized retail Consumers- stress on the right infrastructure put how well preserved buildings, air conditioning, trained personnel, electronic machine, parking and correct display of the Category instance. The customers feel good, everything seems to see it that the purchase easier for them. You do not need to

wait for everyone to see the products. SelfSelect saves you time and more opportunities and satisfaction. Fix costs eliminates the risk of misleading. They use various discounts and advertising by manufacturers drafts presented. You also obtain product of different varieties and the right quality. High availability of jobs - it will be great job opportunities in the country (in crores), as its opening of shopping centers and warehouses. The entry of modern retailers is to provide the market to expand large amount of additional jobs in retail. Opportunities arise from ordinary workers vary to specialized officials. Employment opportunities will be retail manager, cold chain, warehousing and logistics in retail. The jobs will be for urban and rural youth. There will be huge scope of MBA as they will appreciate working with world-class chain of retailers. Indian Farmers: The main benefits of FDI in retail would for farmers will be able to get a good return on their crops by providing organized by tying long-term contracts with them retailers that they are unable, in the local Mandi for sale. The payments will be paid directly into bank accounts and be free of commission. The big retailers are also save 10-15% in comissions, buy by directly fruits and vegetables. Reduced Supply Chain Management - The big players of retail marketing and production companies come in direct contact, to reduce as many intermediary chains. Manufacturers also provide many incentives for their product, which is beneficial to consumers. Proper control system: to increase tax revenues such as VAT and service tax. The organized distribution with computerized billing system is also more revenue result from commodity taxes such as VAT and service tax to the government. So tax would increase buoyancy of the economy. Inflation control: inflation be curbed.

Reasons for promotion of FDI in Retail

The great advantage of FDI is that it is both supplementary and complimentary in terms of local investments. FDI can a company get a better access to top-class technology and additional resources. They are also exposed to management practices in fashion around the world and also get the chance to be a part of the global market system.

The Indian government had commissioned on International Economic Relations (ICRIER) Indian Council for Research to carry out a study on the impact of organized retail practices to its unorganized counterpart.

ICRIER submitted the report in 2008. The study on the benefits indicated that the growth of organized retail for different subscribers, such as consumers, producers will have, and farmers.

The government has decided, based on the results in other countries and the ICRIER study that this decision would result in the two rear and front end infrastructure to a greater influx of FDI. It was expected that the agricultural sector would be more efficient and to use in a better position technology.

It was also expected that this decision will be provided in more and better jobs and the best practices would be introduced in the world in India. Both farmers and consumers will see more convenient prices and higher quality in the future, and this will both help the classes.

The government also for the procurement of 30 percent returns from local producers to a mandatory condition before foreign companies provide a significant boost to the manufacturing sector in India to create. Jobs are expected in rural and urban areas through more back and are frontally operations of more FDI resulting available.

Domestic retail units and distributors to pull their socks up and improve efficiency, since this decision. Consequently, consumers will expect better services and the producers to obtain, which also receive better pay are the source products.

Strengths of India to attract FDI

1. India has the tenth largest economy in the world and has a great

scope.

2. India is ranked third in terms of purchasing power parity PPP,

which is eradicate the comparison problem.

3. India is not saturated unlike China and other countries, so

companies can develop easily.

4. India is second largest country in relation to population, so there is

great availability of cheap and skilled labor.

5. “India’s GDP has increased 2900% from 1970 to 2012 and counts

1.84$ trillion.”

6. India’s demography suits the best and the 50% of the population is

less than 25 years of age.

7. Great relaxation is given by government which is beneficial for

investing company.

8. Political situation is well as government of India itself

encouraging the foreign investment.

9. RBI regulates the stocks and debt market of India, no chances of

scams.

10.Balance sheet of India reveals its quality and the strong corporate

governance.

CONCLUSION

The concept of FDI is now a part of India's economic future, but the concept remains vague to many, despite the great impact on the economy. FDI means Foreign Direct Investment to make in which to invest in India foreign investors. FDI in India's retail sector has both advantages and disadvantages. It is advantageous to be collected to the government as tax revenues for infrastructure development is used, not only makes it easier for farmers and consumers and to a large extent an advantage. It will also provide job opportunity is for developing countries is crucial. On the other hand, it is cut-throat competition to promote cartels especially in the organized retail, the creation of monopolies, housing prices rise, lead etc. Higher competitive advantage, make it like any product better by others trying to increase their profits, which ultimately lead is in high quality products at low prices. Opponents of FDI in retail argue that it will bring a massive job losses, but frankly, it will only lead to sprout and new redistribution of jobs with some drying up (as an intermediary). The argument that farmers are suffering due to the formation of monopolies, is weak. Stores like Wal-Mart and Tesco are very few, (to keep property costs down) on the outskirts of cities and in the surrounding area local kiranas can not penetrate.

FDI is an advantage and disadvantage at the same time but it just depends on the way we implement it in our country, so that FDI have no bad influence on the Indian business. Government must make some rules so that it is advantageous to obtain for the Indian market, retailers and customers the necessary services. Can this may be Indian economy, in terms of employment is rising helpful. The experience of successful ASEAN countries clearly shown how FDI can play a leading role in creating fast, export-led growth. In the retail sector are frequently changes therefore survive in retail will depend on the ability to change, adapt. The Indian retailers need to develop the unique nature of the country, taking into account the right systems and processes. FDI would on the world market result in a broader integration of India and as such it is imperative that the government promote the general economic development and social welfare of the country in

this sector. So FDI should be implemented to a limited extent, so that it frees a good effect on India market. If done in the right way, it can prove to be a blessing and not a curse.

The performance of FDI is exposed to today around the satisfactory level, the specific problems and challenges. Today we have more than $ 303.48 billion as foreign exchange reserves and foreign debt of about$297.5 billion, which we further improved by Promotions Export, liberal investment opportunities for foreign investors.

The future of foreign retail players is also uncertain how the Indian retail players. No doubt the opening of investment opportunities for the foreign investor is the Indian industry more competitive and to make some of them, the remains as small retailers and shopkeepers can be used to fight. It was revealed from the above analysis that FDI approval given by the Government to benefit almost all sectors of the economy. There are some people who try to deceive people for their own benefit and the entry of foreign retailers in India opposite. FDI not only benefit society in the retail sector, but also helps in the economic development of the country. The India Retail Industry is to be do according to his way toward the next boom industry gradually.

SUGESTIONS FOR THE GROWTH OF RETAIL INDUSTRY :

FDI since 1991 has proven to be game changer for wide segments of Indian industry. FDI has the quality, productivity and production changed in areas where it is allowed.

1. India has in the development of infrastructure as India to invest only on the missing, which majorly our trade sector will affect.

2. India to increase investment capacity.

3. India should make FDI policy more liberal, so that they face competition with other emerging countries.

4. Bureaucratic delays and various government permits and approvals, the various ministries must be fastened.

5. Restrictions on caps and registration in areas other than those of national importance sector must be further liberalized and ongoing policy review needs to be done.

6. Government needs to ensure coherence of the policy to improve the economy and investor confidence