FDI IN RETAILFDI IN RETAIL

Group Members• Altamash Shaikh - 64• Kamaluddin Shaikh - 68• Ismil Shaikh - 67• Rahul Shukla - 81• Virat Tiwari - 91• Devansh Parmar - 93

DEFINITION OF FDIDEFINITION OF FDI

What is FDI ??

WHAT IS FDI IN WHAT IS FDI IN RETAIL??RETAIL??

IMPORTANCE OF FDI IN IMPORTANCE OF FDI IN DEVELOPING COUNTRIESDEVELOPING COUNTRIES

Total stock of world FDI increased from 8% - 26%.

Global stock of inward FDI increased 22% - 32%.

Global stock of outward FDI increased 10% - 17%.

China largest gainer of FDI.

FDI IN DIFFERENT FDI IN DIFFERENT COUNTRIESCOUNTRIES

Germany & Europe. South Africa. UAE (United Arab Emirates).

Corporates are increasingly coming into this sector.

Demand of branded goods on a large scale.

Demand of new and varied products. High quality product is preferred . Varied window display. E-tailers increase the presence.

World's largest industries exceeding US$ 9 trillion. Dominated by developed countries. 47 global fortune companies & 25 of Asia's top 200

companies are retailers. US, EU & Japan constitute 80% of world retail sales.

Retail trade in Europe employs 15% of the European

workforce (3 million firms and 13 million workers).

RETAIL SECTOR IN RETAIL SECTOR IN INDIAINDIA

India 5th Largest retail market Globally.

Contributes 14-15% in total GDP.

Fastest growing retail market in world.

Classified as:

1.Organised Retail Sector. 2.Unorganized Retail Sector.

FDI IN INDIAFDI IN INDIA 1991 - Trade in wholesale & retail. 1997 - Cash & carry wholesale 100% only

after Govt. approval. 2006 - Cash & carry under automatic route. - 51% FDI in Single Brand. 2011 - 100% FDI in Single Brand. 2012 - 51% FDI in Multi Brand with

Limitations. - 49% FDI in Aviation. - 74% FDI in Broadcasting.

o Incentives attract FDI.

o Market size and potential are sufficient

inducers.

o Tax breaks, import duty exemptions, land

and power subsidies, and other enticements.

FDI POLICY- OVER THE YEARS.FDI POLICY- OVER THE YEARS.

EFFECT ON EFFECT ON ECONOMYECONOMY

Help in Economic growth of country.

Contribute in growth of Total GDP.

Retail sector presently contributing

15% to Total GDP.

Assumed to contribute even more in

coming years.

COMPARISON OF FDI COMPARISON OF FDI INFLOW.INFLOW.

India China

Focus on Services Focus on Industry

High labor cost Low Labor Cost

Home grown Capital FDI

Old technology Adaptability to Latest technology

Democratic Government Communist Government

ADVANTAGESADVANTAGES Generates huge employment

Increased investment in technology

The huge tax revenue generated.

The consumer gains from the wide variety of choices and a more diversified basket.

DISADVANTAGESDISADVANTAGES Foreign Players would displace

the unorganized retailers because of their superior financial strengths.

The entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs.

Increase in real estate prices and marginalize domestic entrepreneurs