Project Report on Fdi

7/25/2019 Project Report on Fdi

1/38

CHAPTER 1: INTRODUCTION

Overview

Over the past two decades, many countries around the world have experienced

substantial growth in their economies, with even faster growth in international

transactions, especially in the form of foreign direct investment (FDI). he

share of net FDI in world !D" has grown five#fold through the eighties and the

nineties, ma$ing the causes and conse%uences of FDI and economic growth a

sub&ect of ever#growing interest. his unprecedented growth of global FDI in

' around the world ma$e FDI an important and vital component of

development strategy in both developed and developing nations and policies are

designed in order to stimulate inward flows. Infact, FDI provides a win * win

situation to the host and the home countries. +oth countries are directly

interested in inviting FDI, because they benefit a lot from such type of

investment. he home- countries want to ta$e the advantage of the vast mar$ets

opened by industrial growth. On the other hand the host- countries want to

ac%uire technological and managerial s$ills and supplement domestic savings

and foreign exchange. oreover, the paucity of all types of resources vi/.

financial, capital, entrepreneurship, technological $now# how, s$ills and

practices, access to mar$ets# abroad# in their economic development,

developing nations accepted FDI as a sole visible panacea for all their scarcities.

Further, the integration of global financial mar$ets paves ways to this explosive

growth of FDI around the globe.

his report attempts to ma$e a contribution in this context.

HISTORICAL BACKGROUND

1 | P a g e


2/38

FDI

One of the most stri$ing developments during the last two decades is the

spectacular growth of FDI in the global economic landscape. hisunprecedented growth of global FDI in ' around the world ma$e FDI an

important and vital component of development strategy in both developed and

developing nations and policies are designed in order to stimulate inward flows.

FDI to developing countries in the 's was the leading source of external

financing and has become a $ey component of national development strategies

for almost all the countries in the world as a vehicle for technology flows and an

important source of non*debt inflows for attaining competitive efficiency by

creating a meaningful networ$ of global interconnections. FDI provide

opportunities to host countries to enhance their economic development and

opens new opportunities to home countries to optimi/e their earnings by

employing their resources. In the past decades, FDI was concerned only with

highly industriali/ed countries. 01 were the world-s largest recipient of FDIduring 23 with an investment of '45 million. 6ow, during course of time,

FDI has become a vital part in every country more particularly with the

developing countries and thus its share is increasing year by year.

2 | P a g e


3/38

1ource7http788www.en.wi$ipedia.org8wi$i8Foreign9direct9investment.:etrieved from ;i$ipedia)

In India, FDI has risen considerably in post*reform period. he importance

and category of FDI has changed significantly since India has opened up its

economy. his has provided high prospects that FDI may serve up as a channel

to advanced economic growth. nother important area where FDI can play its role

significantly is the Indian retail sector which is promising one. FDI in Indian

retail is permitted in selective cases sub&ect to restrictions.FDI is not yet

permitted in ulti +rand :etailing in India due to continuous opposition from

multiple political %uarters.

3 | P a g e


4/38

FDI IN RETAIL SECTOR

India has emerged as an attractive destination for retailing over the last

few years. he most noteworthy phase of the growth of the sector was between

2#23, when the revenues increased by about ?.= per cent. his

encouraged international retailers to evaluate an entry into the Indian mar$et#

place. For three consecutive years, India topped the list as the most favourable

destination of retailers such as ;al#mart, @arrefour and esco. he estimated

si/e of the retail industry in our nation is approximately A5B billion with an

annual compounded growth rate of '' per cent. Incidentally, the share oforgani/ed retail is relatively small at A23 billion which is &ust 3 per cent of the

total mar$et compared to a typical share of B#4 per cent in 6orth >merica and

;estern Curope and 2#? per cent in the Far#Cast >sian ar$ets. Our share of

organi/ed retailing is significantly lower than in other >sian @ountries such as

@hina (2 per cent), Indonesia (? per cent), hailand (5 per cent), alaysia

(== per cent), and aiwan (4' per cent).

4 | P a g e


5/38

India-s retailing industry is essentially owner manned small shops. In

2', larger format convenience stores and supermar$ets accounted for about 5

percent of the industry, and these were present only in large urban centres.

India-s retail and logistics industry employs about 5 million Indians (?.? of

Indian population).0ntil 2'', Indian central government denied foreign direct

investment(FDI) in multi# brand retail ,forbidding foreign groups from any

ownership in supermar$ets ,convenience stores or any retail outlets. Cven

single#brand retail was limited to =' ownership and a bureaucratic process.

he typical Indian retail shops are very small.Over'5million outlets operate in

the country and only 5 of them being larger than = s% ft (53 m2) in si/e.

India has about '' shop outlets for every ' people.

JUSTIFICATION

his topic has been chosen by the investigator as her pro&ect wor$ as it

seemed her a burning topic. his topic hovered on the front page of every

newspaper, it was every news channel-s issue of discussion. Cvery newspaper

and every news channel came up with their variety of opinions, some with

positive and some with negative aspect of the issue i.e. FDI.his threw the

investigator into a dilemma. 1o, to come out of the dilemma and have a clear

and broader aspect of the issue with actual facts, this topic was chosen by her.

>lso, the investigator thought this topic to be a uni%ue one (as less no. ofcollege mates too$ this topic)

5 | P a g e


6/38

IMPORTANCE OF THE STUDY

It is apparent from the above discussion that FDI is a predominant and

vital factor in influencing the contemporary process of global economic

development. he study attempts to analy/e the important dimensions of FDI in

India. he study wor$s out the trends and patterns and overall relationship

between FDI and :etail sector.

OBJECTIES OF THE STUDY

The study covers the following objectives:

1. o present the current status of FDI in Indian retail along with further

scope.2. o analy/e the rationality of allowing FDI in Indian retail with

special importance to multi * brand retailing.?. >nd thus evaluate the impact of FDI on the overall economic !rowth of

the country and to indicate some measures that may be ta$en into

consideration as part of the policy ma$ing process.

METHODOLOGY

his paper attempted to highlight the implications of FDI in multi#

brand retailing along with general overview of FDI based on secondary

information gathered from diversified sources which include literature survey,

news paper articles and internet. oreover, the present paper can be considered

as a review paper.

6 | P a g e


7/38

icrosoft Office ;ord, Cxcel and @harts, mainly @olumn and Eine

!raph, associated with it were used extensively for visual and better

understanding.

LITERATURE REIE!

1ome of the reviewed literature and case studies are stated below7

Sapna Hooda,a ". 1tudy Of FDI G Indian

CconomyH focused on the impact of FDI on various sectors and thus on overall

economy and on policies G managerial implications arising from this(potential)

impact with reference to various statistical data.

Pulkit garwal ! "sha Tyagi through their case study on FDI in

:etail 1ectorH presented various small but vital definitions and the present

scenario G impact of FDI on :etail 1ector (both single and multi brand) .with

this they also highlighted the scope of FDI in :etail 1ector in the future.

he @hanging Face of Indian :etailH byProf.#alyanasundara$" Department

Of anagement 1tudies, !arden @ity @ollege, +angalore.

FDI in ulti#+rand :etailing #> 1tudy on Indian 1cenarioH byParag Shil

,Prantik %oy,>ssistant "rofessor, Department of @ommerce, >ssam 0niversity.

LIMITATIONS OF THE STUDY

7 | P a g e


8/38

he assumption that FDI was the only cause for development of Indian

economy in the post liberalised period is debatable. Eac$ of availability of data over a wide range of years limited the scope of

investigation.

ime limitation also acted as a hurdle to have in depth study of the topic.

>s Curopean onetary 0nion was not formed before ', so this restricted the

investigator to analysis more number of years.

>s the investigator is not a full time scholar, the study is narrowed down the

line. y incapacity to conclude over the above topic of study due to its diverse

nature and relevance under different scenario.

CHAPTER #: CONCEPTUALFRAME!ORK

DEFINITION OF RETAIL

In 25, he


9/38

hus,retailing can be said to be the interface between the producer and

the individual consumer buying for personal consumption. his excludes direct

interface between the manufacturer and institutional buyers such as the

government and other bul$ customers.:etailing is the last lin$ that connects the

individual consumer with the manufacturing and distribution chain.> retailer is

involved in the act of selling goods to the individual consumer at a margin of

profit.

DIVISION OF RETAIL INDUSTRY

he retail industry is mainly divided into7# ') Organi/ed 2) 0norgani/ed

:etailing

Organi/ed retailing refers to trading activities underta$en by licensed

retailers, that is, those who are registered for sales tax, income tax, etc. hese

include the corporate#bac$ed hypermar$ets and retail chains, and also the

privately owned large retail businesses.

0norgani/ed retailing, on the other hand, refers to the traditional formats

of low#cost retailing, for example, the local kirana shops, owner manned

general stores,paan&beedishops, convenience stores, hand cart and pavement

vendors, etc.

he Indian retail sector is highly fragmented with B per cent of itsbusiness being run by the unorgani/ed retailers. he organi/ed retail however is

at a very nascent stage. he sector is the largest source of employment after

agriculture, and has deep penetration into rural India generating more than '

per cent of India-s !D". he total retail mar$et in India is estimated at 01A 5B

+n in 2''.he Food G !rocery segment is the largest retail category and

accounts for about B of the total retail mar$et.

9 | P a g e


10/38

RETAIL MARKET CATEGORIES

CATEGORY 2011 ESTIMATES(IN US $Bn)

Food and grocery ?2=

>pparel ?=

ewellery and watches 2=.3

@onsumer Clectronics G I 22.B

"harmacy '?.

Furnishing and furniture .'

:estaurants G food oints 4.4

Footwear 5.=

+eauty 1ervices '.?


11/38

simple words, FDI refers to capital inflows from abroad that is invested in or to

enhance the production capacity of the economy.

FDI POLICY WITH REGARDS TO RETAILING IN INDIA

It will be prudent to loo$ into "ress 6ote 5 of 23 issued by DI"" and

consolidated FDI "olicy issued in October 2' which provide the sector

specific guidelines for FDI with regard to the conduct of trading activities.

a) FDI up to ' for cash and carry wholesale trading and export trading

allowed under the automatic route.

b) FDI up to =' with prior !overnment approval (i.e. FI"+) for retail trade of

1ingle +rand- products, sub&ect to "ress 6ote ? (23 1eries).

c) FDI is not permitted in ulti +rand :etailing in India.

ADVANTAGES OF FDI IN RETAIL SECTOR

:etailing is one of the world-s largest private industry. Eiberali/ations in

FDI have caused a massive restructuring in retail industry. he benefit of FDI inretail industry superimposes its cost factors.

Cheaper pr!"#%n &a#%'%%e

FDI will ensure better operations in production cycle and distribution.

Due to economies of operation, production facilities will be available at a

cheaper rate thereby resulting in availability of variety products to the ultimate

consumers at a reasonable and lesser price.

11 | P a g e


12/38

A*a%'a+%'%, & ne- e#hn'.,

FDI enables transfer of s$ills and technology from overseas and develops

the infrastructure of the domestic country. !reater managerial talent inflow from

other countries is made possible. Domestic consumers will benefit getting great

variety and %uality products at all price points.

Ln. er/ #ah '%"%!%,

FDIwill provide necessary capital for setting up organi/ed retail chain

stores. It is a long term investment because unli$e e%uity capital, the physicalcapital invested in the domestic company is not easily li%uidated.

Lea! !r%*er &r he #"nr, e#n/%# .r-h

FDI would create a competition among the global investors, which would

ultimately ensure better and lower prices thus benefiting people in all sections

of the society. here would be an increase in the mar$et growth and expansion.

It will increase retail employment and suppress untrained manpower and lac$ of

experience. It will ensure better managerial techni%ues and success.


13/38

DISADVANTAGES OF FDI IN RETAIL SECTOR

>ccording to the non#government cult, FDI will drain out the country-s

share of revenue to foreign countries which may cause negative impact on

India-s overall economy.

he domestic organi/ed retail sector might not be competitive enough to

tac$le international players and might lose its mar$et share.

any of the small business owners and wor$ers from other functional

areas may lose their &obs, as lot of people are into unorgani/ed retail business

such as small shops.

FDI IN INDIAN RETAIL

Eiberali/ations in FDI have caused a massive restructuring in retail

industry. he benefit of FDI in retail industry superimposes its cost factors.

Opening the retail industry to FDI will bring forth benefits in terms of advance

employment, organi/ed retail stores, availability of %uality products at a better

and cheaper price. It enables a country-s product or service to enter into the

global mar$et, permitting FDI in retail sector may open several benefits to

farmers, consumers and the entire economy as well but it should not be one

country-s planned ob&ective to hamper the economy of another country or to

create political unrest. he !overnment of India was initially very anxious of

allowing FDI in retail sector due to fear of &ob losses, procurement from

international mar$et, @ompetition and loss of entrepreneurial opportunities but

over time, India had to open up the retail sector to FDI as per ;O

13 | P a g e


14/38

pronouncement. he !overnment in a series of moves has opened up the retail

sector slowly to FDI.

FDI IN INDIAN RETAIL - FURTHER SCOPE

a&or findings7

Despite the numerous obstacles that existing players and new mar$et

entrants have to deal with, the Indian retail mar$et bristles with abundant

promise. >ccording to !lobal :etail Development, Index (!:DI) reports

published by the leading 01 based consulting group, > Jearney in une 2',

India is the ?rd most attractive retail mar$et for global retailers among the

largest emerging mar$ets.he report also highlights the well documented fact

that organi/ed retail constitutes a mere = of the total annual revenues

generated, hence providing a tremendous window of opportunity for both

domestic and international retailers to tap into a burgeoning albeit fragmented

mar$et. India-s retail industry is estimated to be worth approximately 01

A5''.24 billion and is still growing, expected to reach 01 A45.3 billion in

2'= >s part of the economic liberali/ation process set in place by the Industrial

policy of '', the Indian !overnment has opened the retail sector to FDI

slowly through a series of steps excepting FDI in multi# brand retailing, which

has so far been prohibited in India.

FDI IN MULTI-BRAND RETAILING

:etailing is one of the world-s largest private industries. "ermitting FDI

in retail sector of any country will call for many opportunities. FDI in multi

brand retail implies that a retail store with a foreign investment can sell

multiple#brands under one roof. Despite many issues which are against of

allowing FDI in multi#brand retailing, It will ensure ade%uate flow of capital

14 | P a g e


15/38

into host country in a manner li$ely to promote the welfare of all sections of

people of society, "articularly farmers, and consumers as well.

FDI IN INDIAN MULTI-BRAND RETAIL RATIONALE

he rationale for allowing FDI in multi#brand retail trade may be set out

as follows7

'. >llowing FDI in multi * brand retail trade will benefit consumers and

farmers, and will also aim at bringing down inflation. Farmers, in this case, may

be protected from the domination of intermediaries who dominate the interface

between the manufacturers or producers and consumers in most cases and ma&or

part of the share of profit is eaten by those middlemen causing loss to the

farmers. Further, consumers will get variety of products at cheaper prices and

will have more choice to get international brands at one place.

2. >llowing international retailer such as ;al#art and @arrefour, which have

already set up whole sale operations in the country, to set up multi#brand retail

stores will assist in $eeping commodity prices under control, will cut waste, as

big players will build bac$end infrastructure.

?. "ublic Distribution 1ystem is expected to be improved through allowing FDI

in retail trade.

5. FDI in retail trade, if permitted, then more foreign companies will come and

new infrastructure will build. +an$ing 1ector will grow conse%uently as money

re%uired to build infrastructure would be provided by ban$s.

=. Eac$ of infrastructure (e.g., cold storages) in the retailing chain has been one

of the big issues for years which have led the process to an incompetent mar$et

mechanism. FDI might help India over come such issues by channeli/ing the

resources in the right manner.

15 | P a g e


16/38

3. "ermitting FDI in retail trade will open huge &ob opportunities. Cstimate says

it will touch not less than 4 la$h obs.

B. >llowing FDI in multi#brand retail will contribute to foreign currency reserveand narrow the current account deficit as well. Further, @ompetition within the

host country sector is a critical driver of improvements in sector performance as

a result of FDI. FDI-s potential for impact can be greater because of the

combination of scale, capital, and global capabilities which allow 6@s to

close existing large productivity gaps more aggressively. FDI can be a powerful

catalyst to spur competition in industries characteri/ed by low competition and

poor productivity such as retail industry due to the current scenario of low

competition and poor productivity.

16 | P a g e


17/38

CHAPTER $:CASE STUD%"ANALYSIS&FINDINGS

CASE STUDIES OF SINGLE RETAILMARKET

CASE STUDY COCA COLA

@oca cola was the first international soft drin$s brand to enter in

crores soft drin$ mar$et of India in early 'Bs. Indian mar$et was dominated

by domestic brands, with Eimca being the largest selling brand. @ola was the

largest selling flavour with mar$et share of 5, Eemon drin$s ?' and orange

drin$s only '. 0ntill'BB, @oca#cola was the leading soft drin$ brand in

India. +ut due to norms set by the Foreign Cxchange :egulation >ct (FC:>),

@oca#cola left India and did not return till '?.

RBI's move on Foe!"n E#$!%& Re"$(%!on

In 'B5, ultinationals operating in low priority areas li$e consumer

goods were as$ed by :+I (under FC:>) to step down e%uity to 5 either

through e%uity dilution or through e%uity sale.

Non-s%(%e"!) )(%e"o& o* *oe!"n )om+(n!es

@o$e, which operated in India through a branch office, submitted its plan

for stepping down e%uity to the :+I. It offered to hold 5

17 | P a g e


18/38

e%uity in its bottling and distribution units, but refused to step down e%uity in its

technical and administrative unit.

Co,e (% Lo""e He(s .!%/ %/e In!(n Govenmen%

1ince this was not in line with FC:>, which permitted not more than a 5

holding in all operations, @o$e was as$ed to comply properly with the new

norms. @o$e decided to windup its operations in India, but %uit ma$ing

allegations that the Indian !overnment was forcing it to share its secret formula

for ma$ing its concentrate.

B(me "(me !n ( B( Boo

he Indian !overnment slapped its counter charges and accused the

parent of bleeding profits and repatriating large sums of funds abroad (as

administrative charges) even when the Indian operations were posting losses.

Further, there were allegations of @o$e abusing import licenses# against which it

imported the concentrate# all of which resulted in bad blood between the two

parties.

Co,e E0!s%s In!(

In 'BB, @o$e left India and did not return for nearly two decades. +y

which time, the economic situation had undergone a ma&or transformation.

ore importantly, the particular provision in FC:> had been diluted

completely.

Co,e e en%es In!(

@o$e factored in all these issues at the time of its re#entry. In its

application to IndiaKs Foreign "romotion +oard (FI"+) in 'B, it voluntarily

offered to divest 5 in favour of the Indian public through an I"O at the end

18 | P a g e


19/38

of three years. his was despite the fact that the FDI norms for the soft drin$

sector did not re%uire mandatory divestment of sta$e and nobody was forcing it

to do so.

A He(%/& Go.%/ %o %/e In!(n E)onom&

>fter re entry, @oca#cola India has made significant investment to build

and continually consolidate its business in the country, including new

production facilities, waste water treatment plants, distribution systems and

mar$eting channels .@oca#cola India is among the country-s top international

investors, having invested more than 01D ' billion in India in the first decade,

and further pledged another 01D 'million in 2? for its operations. @oca#

cola directly employs approximately 3, people and indirectly creates

employment for more than '2=, people in related industries through its vast

procurement, supply and distribution system. he success story of @oca#cola

attracted other investors to invest in India which resulted in competition in

Indian soft drin$ mar$et.

STATISTICAL DATA1 FACT SHEET

19 | P a g e


20/38


21/38

CASE STUDY OF MULTI BRANDRETAILING

Wal-Mart in India

WAL-MART>S FIRST SHOP IN INDIA

In December 23, ;al#art Inc. believed that by the year 2'=, ?= of

India-s retail sales could be from chain stores . his was a radical increase from

the prevailing 2. In ay 2, ;al#art was ready to open its first store inIndia. he reason for ;al#art-s entry in India was clear * he Indian middle

class . he world-s biggest retailer had been silently wor$ing on its strategy for

India for around two years. om#and#pop stores and traditional distribution

networ$s dominated the A?B= billion Indian retail mar$et. ;al#art-s first

outlet was set to launch in the city of >mritsar, "un&ab in 6orth India. he first

store air#conditioned and built over =, s%. ft. was on the outs$irts of thecity, >mritsar. he store employed 2 locals and was li$ely create = indirect

&obs. In the first few wee$s itself, the company had managed to sign on close to

?=, members.


22/38

CASE U3ATES5SNIETS5CURRENT STATUS

=7= &oint venture7 In India, ;al#art has a =7= &oint venture with

+harti Cnterprises in the wholesale cash#and#carry segment.

Direct Farm "rogram7 ultinational retail giant, ;al#art-s Direct Farm

"rogram in India is a partnership with '' small and marginal farmers near

Eudhiana in "un&ab where it encourages cultivation of safe, high#%uality,

seasonal vegetables. Farmers are advised at every stage of cultivation by field

agronomists. Farmers learn about nursery management, transplanting, nutrient

management, as well as harvest and post#harvest practices.

;al#art India in 2'7 In 2', +harti#;al#art plans to launch seven

+est "rice odern ;holesale @ash#>nd#@arry stores across India. hese stores

will be ', s% ft in si/e and each store will involve an investment of A3#B

million.

1ourcing from India7 ;al#art has a large sourcing business in India.

he retail ma&or sources goods worth A'2= million a year from "un&ab. In 2',

;al#art is planning to increase sourcing from India to strengthen its global

business.

;al#mart Eabs in +angalore 7 In addition to its :GD centre in the 1ilicon

Lalley, ;al#art plans to set up another facility in +angalore, India (expected

to be set up by Dec 2'') with about ' developers to wor$ on technologies

and solutions for ;al#art-s global e#commerce business.

YES TO WAL-MART- REASONS

'. ;al#art is world-s largest corporation and it en&oys high status and

recognition, its status and recognition would help ;all#art in dealing

effectively with locals in India.

22 | P a g e


23/38

2. Its distribution centre and logistics capabilities are $ey strengths adding

unmatched value to its entire value chain.

?. It has immense buying power when dealing with 1uppliers.

5. ;al#martKs focused strategy for human resource management will allow the

company to hire and retain the needed wor$ers in India.

=. Its cross#doc$ing and effective inventory management gives cost advantage

to sustain its Cvery Day Eow "rice 1trategy.

3. >s ma&ority of target customers are price conscious in India its low price G

customer focus would help ;all#art to establishing and building loyalty.

B. >ccess to largest retail mar$et worth A= billion with only 2

of organi/ed retail.

4. One of the fastest growing economies with growing middle class.

. "otential for merger and ac%uisition of local retail chain can ma$e ;all#art

in a dominant player in Indian retail mar$et.

'. ;all#art can diversify from large super centres to local mall based sites.

NO TO FDI IN RETAIL SECTOR THROUGH WALL-MART

;>E>:-1 OLC:0:C1

It is one thing to permit FDI in manufacturing (or high priority

technology content sectors), as was done in '', and %uite another to thin$ that

FDI will be a panacea for all the country-s ills.


24/38

It is in these years that imports from @hina to 01 tripled in value from A

billion to A2B billionN >ccording to the 01 @ensus, between '2 and 2B, the

number of independent retailers fell by more than 3,.

>s ;al#mart-s business continued to grow and the stores began to expand,

communities lost their local retailers and there was less demand for services

such as accounting and graphics design. Eess advertising revenue for local

media outlets also resulted in fewer accounts for local ban$s.

he classic example is the story of destruction of Iowa. In '4?, ;al#mart

opened its first store in the 1tate. 1ince then, several other retail stores were

forced to close shutters.

he growth of ;al#mart has resulted in decreased wages, the shrin$ing middle#

class and increase in wor$ing poor. he savings due to shopping at ;al#mart

cannot compensate for the loss of &ob opportunities and income. here are well#

researched articles suggesting that the 01 is being transformed from a

technologically#advanced manufacturing economy to a mere consuming

economy on account of higher imports.

;al#mart has ensured that the >merican family would not be able to afford

shopping anywhere else. :ight now, the average family of four spends

approximately A5, a year at ;al#mart. his year, the ;alton family (owners

of ;al#mart) will be able to poc$et billions in dividends from their holdings.

he bargaining power of the global trading giant with the !overnments is so

high that it eventually puts pressure on 1tate finances, through tax#brea$s,

effective outsourcing models to $ill production &obs, and demands for increased

investment in social initiatives by !overnments due to &ob displacements.

24 | P a g e


25/38

1 DC@I1IO6

;al#mart faced allegations of bribery that helped it set up stores much

ahead of its competitors within exico. his resulted in violation of exican

law and the 01 Foreign @orrupt "ractices >ct. horough investigations were

not carried out due to technicalities in the law of limitation and to avoid further

adverse publicity to ;al#mart.

here are studies that to show that giant trading corporations such as ;al#

mart contribute to poverty, which could prove costly in a country such as India

with dense population with diverse base.

One strong argument put forward is the possible savings to the

consuming public. "erhaps, in the absence of FDI in retail, a section of

affordable consumers is paying more. +ut that does not mean the displacement

of small#time traders is a desirable development. Opening up India to overseas

trading giants on an exaggerated perception of benefits of foreign investment is

not such a wise policy decision.

25 | P a g e


26/38

STATISTICAL DATA1 FACT SHEET


27/38

83;3=? T/e (ve("e *$-%!me /o$& .("e *o ( W(-M(% em+o&ee; T/e

(ve("e *$-%!me /o$& .("e !n me%o (e(s e*!ne (s (e(s .!%/ (

+o+$(%!on o*


28/38

+elow are various data accessed through various sources. hen with the

help of charts prepared, those data8 information were analysed.

hree parameters have been analysed, they are7

G3 GRO6T 8 ANNUAL

3I98 O G3

G3I98 O G3

+ased on the above three parameters ,few inferences have been drawn .

T()*+1: -P %/TH 0 2)

1ource7 ;orld +an$, 2, ;orld Development Indicators

28 | P a g e


29/38

-#

.

#

/

0

1.

1223

1220

1224

122

DEVELOPING COUNTRIES

GDP GROTH !"ANNUAL#

T()*+3: '-"+0 ' -P

29 | P a g e


30/38


.

1

#

$

/

3

0

4

2

1.

1223

1220

1224

122


$DI-! O$ GDP

30 | P a g e


31/38

T()* 4: -"+0 ' -P


.

3

1.

13

#.

#3

$.

$3

/.

1223

1220

1224

122


GDI-! O$ GDP

31 | P a g e


32/38

T()*+5:6*%)) (S"S+/%)- (S"S


P6on#availability forces to consider average of the data available

1223 1220 1224 122.

3

1.

13

#.

#3

$.

GDI-5 67 GDI

FDI-5 67 GDP

GDP GRO!TH 5

PERCENTAGE

32 | P a g e


33/38

$INDINGS

r/ Ta+'e 1

It has been found that among various region in the world Cast >sia

G"acific and 1outh >sia shows consistency throughout the period experiencing an

annual growth rates of at least 5.=#= (except in '4 Cast >sia faces negative

growth rate i.e (#)'.') which is far above the world average of 2.5.

On the contrary, Curope G @entral >sia experienced growth below world average.

;hile on one hand, Eatin >merica , iddle Cast and 1ub#1aharan >frica showedan increasing and then decreasing growth rates.

On the other hand, the Curopean onetary union showed first decreasing and

then increasing growth rate.

r/ Ta+'e 2

he FDI8!D" ratio was in no region above 5 throughout the wholetime periodcovered. sian G"acific region . h is

mi ght exp la in to a la rge ex te nt thi s regions success with respect to

attracting mar$et#see$ing FDI.

11> lies in the opposite end of the spectrum, in the sense that this region has been

unable to mobili/e enough domestic resources for the !DI, which since

the mid#'4s has lied below 2 of !D" and below the world average.

CuropeG @entral >sia has experienced a negative downward trend in!DI-s percentage share of !D" .

33 | P a g e


34/38

Eatin >merica has almost consistently lied &ust below the world average,

whereas the iddle#Cast and 6orth >frica has lied &ust slightly above .

he above constant !DI#!D" ratio which is generally above ? in Cast >sian G"acific :egion during the period might explain to a large extent this region-s

success with respect to attracting mar$et#see$ing FDI according to the survey

conducted by @hristian Jingombe , International Eabour Office named

C"EOC6 CFFC@ OF FDI O6


35/38

In one hand, it is clear that foreign companies will have ample scope to

go for FDI in Indian retail sector as it is promising one and allowing FDI in

multi#brand retail trade of India is expected to open many opportunities to the

Indian people, as mentioned earlier. On the other, there is a big %uestion whether

it will benefit to one section of people at the cost of others. >t this point, it is

very difficult to ensure these two view points through a particular study.


36/38

available to segregate the effect of FDI to support the validity of this

assumption.

Eac$ of financial support constrained to travel around the 6ation to collect data

and thus to depend on very scarce secondary data. Eac$ of availability of data over a wide range of years limited the scope of

investigation.

ime limitation also acted as a hurdle to have in depth study of the topic. It was

not possible to explore all the factors related to the topic.

>s Curopean onetary 0nion was not formed before ', so this restricted the

investigator to analysis more number of years.

>s the investigator is not a full time scholar, the study is narrowed down the

line.

y incapacity to conclude over the above topic of study due to its diverse

nature and relevance under different scenario.

BIBLIOGRAPHY

owards the completion of the pro&ect, various sites Gpublic domains referred to are

given below:

http://www.indianmba.com

http://www.authorstream.com

http://www.indianresearchjournal.com http://www.legalindia.com

36 | P a g e
http://www.indianmba.com/http://www.authorstream.com/http://www.indianresearchjournal.com/http://www.legalindia.com/http://www.authorstream.com/http://www.indianresearchjournal.com/http://www.legalindia.com/http://www.indianmba.com/


37/38

http://www.articlesphere.com/Article/The-Impact-of-FDI-on-

India---s-Manufacturing- ector/!"#$%& http://www.dipp.nic.in/english/Discuss'paper/D('FDI'Multi)rand

*etailTrading'%+,ul !%$%.pdf http://www.en.wiipedia.org/wii/Foreign'direct'inestment 0 FDI

in India. *etrieed from 1iipedia0 the free encclopaedia. http://www.india-briefing.com/news/foreign-direct-inestment-

indias-single-multibrand-retail- 2!3!.html http://www.outhiawaa4.com/!%$$/%&/fdi-in-multi-brand-retailing-

in-india-crossing-the- rubicon

http:// www.financiale5press.com http:// www.going-global.com

http:// www.iie.com

http:// www.oecd.org

http://www.integraluniersit.ac.in/net/journalsAnd(ublications

http://www.iariw.org/papers/!%%6/&b7!%8olli.pdf

http://www.ncaer.org/downloads/indianeconom/serices/9!aug%

#.pdf ;

http://www.ncaer.org/downloads/indianeconom/forecast/9!aug%#.pdf http://labour.nic.in/

http://www.tsmg.com/download/article/TM?'Tata'*eiew-

,une'!%%+.pdf http://siadipp.nic.in/polic/icrier'report'!#%2!%%&.pdf

http://siadipp.nic.in/polic/changes/pn+'!%%6.pdf

http://www.edc.ca/english/docs/gindia'e.pdf

http://www.cds.edu/download'files/wp3$$.pdf

http://indiafdiwatch.org/fileadmin/1A*;storage/indiwm.pdf http://indiafdiwatch.org/fileadmin/India'site/FDI')roch'$'.pdf

http://www.bijapurar.com/printerfriendl.php@

filenamect'cons'india'better.htm http://www.bijapurar.com/indiamland/indi'celebrating'diersit.

http://www.liemint.com/!%%6/%+/%&$&2!"6/(arliamentar-panel-

recommends.html http://www.financiale5press.com/news/Is-FDI-in-retail-a-death-

nell-for-M=s/$3&%6%/$

37 | P a g e
http://www.oecd.org/http://www.integraluniversity.ac.in/net/journalsAndPublicationshttp://labour.nic.in/http://www.tsmg.com/download/article/TSMG_Tata_Review-June_2006.pdfhttp://www.tsmg.com/download/article/TSMG_Tata_Review-June_2006.pdfhttp://siadipp.nic.in/policy/icrier_report_27052008.pdfhttp://www.cds.edu/download_files/wp311.pdfhttp://indiafdiwatch.org/fileadmin/WARNstorage/indiwm.pdfhttp://indiafdiwatch.org/fileadmin/India_site/FDI_Broch_1_.pdfhttp://www.bijapurkar.com/printerfriendly.php?filename=ct_cons_india_better.htmhttp://www.bijapurkar.com/printerfriendly.php?filename=ct_cons_india_better.htmhttp://www.bijapurkar.com/indiamyland/indi_celebrating_diversityhttp://www.financialexpress.com/news/Is-FDI-in-retail-a-death-knell-for-SMEs/138090/1http://www.financialexpress.com/news/Is-FDI-in-retail-a-death-knell-for-SMEs/138090/1http://www.oecd.org/http://www.integraluniversity.ac.in/net/journalsAndPublicationshttp://labour.nic.in/http://www.tsmg.com/download/article/TSMG_Tata_Review-June_2006.pdfhttp://www.tsmg.com/download/article/TSMG_Tata_Review-June_2006.pdfhttp://siadipp.nic.in/policy/icrier_report_27052008.pdfhttp://www.cds.edu/download_files/wp311.pdfhttp://indiafdiwatch.org/fileadmin/WARNstorage/indiwm.pdfhttp://indiafdiwatch.org/fileadmin/India_site/FDI_Broch_1_.pdfhttp://www.bijapurkar.com/printerfriendly.php?filename=ct_cons_india_better.htmhttp://www.bijapurkar.com/printerfriendly.php?filename=ct_cons_india_better.htmhttp://www.bijapurkar.com/indiamyland/indi_celebrating_diversityhttp://www.financialexpress.com/news/Is-FDI-in-retail-a-death-knell-for-SMEs/138090/1http://www.financialexpress.com/news/Is-FDI-in-retail-a-death-knell-for-SMEs/138090/1


38/38

http://www.indianrealtnews.com/categor/retail-maret/

http://bimtech-retail.com/downloads/FDI'*etailDude.pdf

http://bimtech-retail.com/downloads/*etail'Twist'*etailDude.pdf

http://bimtech-retail.com/downloads/*etailDude'Interiew'$.pdf

http://indiafdiwatch.org/fileadmin/1A*;storage/indiwm.pdf

8THANK YOU9
http://bimtech-retail.com/downloads/FDI_RetailDude.pdfhttp://bimtech-retail.com/downloads/Retail_Twist_RetailDude.pdfhttp://bimtech-retail.com/downloads/RetailDude_Interview_1.pdfhttp://bimtech-retail.com/downloads/FDI_RetailDude.pdfhttp://bimtech-retail.com/downloads/Retail_Twist_RetailDude.pdfhttp://bimtech-retail.com/downloads/RetailDude_Interview_1.pdf

Documents

Project Report on Fdi