Its all about the probable scenario of FDI in Indian retail sectors.

1. By:
Ankita Singh
(2K14G014)
Chirag Parashar
(2K14G028)
Nishant Maheshwari
(2K14IB04)
Parikshit Shome
(2K14G063)
Samarth Chandra
(2K14BFS07)
Sub: Managerial Economics I
Sec: C
Trimester: 1

2. Foreign direct investment (FDI) is a direct investment into production or
business in a country by an individual or company of another country, either by
buying a company in the target country or by expanding operations of an existing
business in that country. Foreign direct investment is in contrast to portfolio
investment which is a passive investment in the securities of another country such
as stocks and bonds.
Types of FDI:
 Horizontal FDI: Arises when a firm duplicates its home country-based
activities at the same value chain stage in a host country through FDI.
 PlatformFDI: From a source country into a destination country for
the purpose of exporting to a third country.
 Vertical FDI: A firm through FDI moves upstream or downstream in
different value chains i.e., when firms perform value-adding activities stage by
stage in a vertical fashion in a host country.

3. • Services , telecommunication , construction and computer software
and hardware these sectors are highly attracted in India.
• India is the second most important FDI destination for transitional
corporations.
• China is the largest recipient of FDI. In 2013 the china has 34.7
market share into the Asia-Pacific region.
• United Kingdom has a very free market economy.
• United States has a open economy and low barriers to FDI. In

4. 50%
0%
35% 24% 41%
Impact on other Indian
industries over FDI in retail
Will benefit
Will not benefit
Can't say
100%
50%
0%
Impact on consumers over FDI in
retail
88%
10% 2%
Will benefit
Will not benefit
Can't say
5
0
4.3
2.4 2
Impact of un-organized retail
sector over FDI in retail
Will benefit
Will not benefit
Can't say

5. MAJOR PLAYERS EXPECTED TO ENTER INDIAN
RETAIL SECTOR

6. How FDI can come in India?
• Franchise Agreements
• Cash and Carry Wholesale trading
• Strategic Licence Agreements
• Manufacturing and Wholly Owned Subsidiaries

7. Benefits Drawbacks
• Inflow of investment and funds. • Increase in the real estate prices.
• Cost reduction. • Promoting associations and creating monopoly.
• Generating more employment. • Rise to cut-throat competition.
• Growth of infrastructure. • Marginalize domestic entrepreneurs.
• Franchising opportunities for local
entrepreneurs.
• The financial strength of foreign organisations
would replace the unorganized players.
• Long run aggregate supply will shift
outwards.
• Absence of proper regulatory guidelines would
induce unfair trade practices.
• Increased efficiency. • Inflation may increase slightly.
• Stimulating infant industries and other
supporting industries.
• Domestic firms may suffer if they are relatively
uncompetitive.
• Implementation of IT in retail.
• Increased local sourcing.
• Provide better value to end customer.
• Improvement in quality of employment.

8. STRENGTH
Boost economic development
Manpower to take the challenge
Highest shop density
High growth rate in retail and wholesale
They can afford losses
WEAKNESS
Low capital investment in retail sector
Lack of trained and educate force
Lack of competition
More prices as compared specialized
shops
Poor infrastructure
Heavy wastage
Opportunity
Hope of major employment
Improve the financial conditions of farmers
Improve to retailers efficiency
Foreign capital inflows
Improve technology and branding
Quality improvement
Cost improvement
Threats
Kirana and retailers lose business
Fear of controlling
Job losses in manufacturing sector
Harm the farmers
Profit will go to foreigners
SWOT of
Indian Retail
Market

9. Conclusion
• FDI in retail sector may boost the socio economic development of
the entire country if implemented wisely carefully while signing the
agreements with the Foreign Investors.

10. Reference
• Research Journal:-
• Impact of Foreign Direct Investment on Indian economy- www.isca.in
• FDI in India and Its Impact –“A Critical Evaluation”(By Pradeep Kumar)
• Effects of Foreign Direct Investment (FDI) in the Indian Economy(By Sourangsu
Banerji)
• FOREIGN DIRECT INVESTMENT IN RETAIL IN INDIA (By Dr. Gaurav Bisaria)-
www.ijemr.net
• FOREIGN DIRECT INVESTMENT IN INDIAN RETAIL SECTOR:ISSUES AND
IMPLICATIONS(By Kulkarni Keerti, Kulkarni Ramakant & Kulkarni Gururaj A.)
• The Opportunities and Challenges of FDI in Retail in India (By Rajib
Bhattacharyya)
• Foreign Direct Investment in India’s Retail Bazaar: Opportunities and
Challenges(By Anusha Chari, T.C.A. Madhav Raghavan)
• Foreign Direct Investment in Indian Retail Sector Pros and Cons(K. R. Kaushik Dr.
Kapil Kumar Bansal)