CAUVERY COLLEGE, GONIKOPPALSouth Kodagu, Karnataka

Affiliated to Manglore University.

UGC SPONSERED ONE-DAY NATIONAL SEMINAR

FDI ON RETAIL BUSINESS

1ST OCTOBER 2014

Presented by:

SAJINA G SHETTY

SDM COLLEGE, UJIRE.

INTRODUCTION:

India’s retail business wasexisting from the period ofBarter system.

5th largest in the world,contributes 14-15% to GDP.

Contribution of FDI is amajor strength.

Retailing = Manufacturing

End Users

Objectives of the study: To analyze the importance of FDI in Indian Retail Market.

To cross compare the country wise share of FDI in Retail Market.

To point out the strengths, weaknesses, opportunities and challenges of FDI in retail sector.

Research Methodology:

This paper is based on secondary data extracted from various journals, articles published in the websites, relevant news reports.

FDI in India’s Single and Multi-Brand Retail:

• 100%Single-Brand

Retail

• 51%Multi-Brand Retail

Single-Brand Retail:

* Single product with single-brand sold Internationally.

* It includes products identified during manufacturing.

* Sale of additional category product must require Govt. approval.

Multi-Brand Retail:

* Selling multiple product under one roof.

* Minimum US$ 100 million investment.

* Only in cities where the population is more than 1 million as per 2011 census.

Share of FDI in Indian Organized Retail Market

Indian organized retail market is estimated to grow up to US$ 84 billion by 2016.

Growth of Indian Retail Market in;

*2006-US$ 310bn*2011-US$ 470bn*2016-US$ 675bn

year 2006

21%

year 2011

32%

year 2016

47%

Growth of Indian retail sector

Benefits Inflow of investment & funds.

Creation of employment.

Provide better value to end user.

Cost reduction & quality improvement.

Franchising opportunities for local entrepreneurs.

Increase in Govt. revenue.

Advancement in infrastructure & production efficiency.

Drawbacks

No proper regulatory guidelines.

Drain out county’s share of revenue to foreign countries.

Adverse effect on small retailers & Kirana stores.

Again India become slaves.

Creation of monopolies in highly profitable sectors.

SWOC Analysis of FDI in Retail Sector:

SWOC analysis is a structured planning method used to measure the strengths, weaknesses, opportunities and challenges.

The strength and weakness of FDI shows the present scenario and the opportunities and challenges will helps to plan for the future.

SWOC Matrix:

S

STRENGTHS

* Effective control over wastage of farm products.

* Flow of Foreign Exchange into the country.

* Generates revenue from tax.

* Variety to customers

WEAKNESSES

* Inefficiency in distribution of products.

* Lack of competitors.

* Low productivity.

* Shortage of talented professionals.

OPPORTUNITIES

* Healthy competition.

* Create transparency.

* Increase export capacity.

* Sustainable development & resolves many economic issues.

CHALLENGES

* Survival of small retailers

* Loss of self -competitive strength.

* Big players can knock-out competition.

* Distortion of culture.

SWOC

Conclusion:

FDI in retailing is going to attract large number of retailplayers towards India. By the 100% and 51% allowance of FDI in retail sector will be a blessing for a rapid growthof Indian economy. The economic process and politicalmovement will play an important role in effective implementation of FDI.