Fdi in Retail

Topics: Investment, Foreign direct investment, Macroeconomics Pages: 7 (2254 words) Published: December 2, 2012
DEFINITION OF 'FOREIGN DIRECT INVESTMENT - FDIAn investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investments differ substantially from indirect investments such as portfolio flows, wherein overseas institutions invest in equities listed on a nation's stock exchange. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies.The investing company may make its overseas investment in a number of ways - either by setting up a subsidiary or associate company in the foreign country, by acquiring shares of an overseas company, or through a merger Or joint venture. The accepted threshold for a foreign direct invest .c 2]‘]dawwwe23x22 ent relationship, as defined by the OECD, is 10%. That is, the foreign investor must own at least 10% or more of the voting stock or ordinary shares of the investee company. 

An example of foreign direct investment would be an American company taking a majority stake in a company in China. Another example would be a Canadian company setting up a joint venture to develop a mineral deposit in Chile.

FDI in Retail Indi988OAT Kearney (a globally famous international management consultancy) recognized India as the second most alluring and thriving retail destination of the world, among other thirty growing and emerging markets. At present, other profitable retail destinations of the world are China and Dubai of Asia. Diverse foreign direct investment in indian retail is greatly cherished by most of the major and leading retailers of USA and European countries, including Walmart (USA), Tesco (UK), Metro (Germany), and Carrefour (France). Liberalization of trade policy and loosening of barriers and restrictions to the foreign investment in the retail sector of India, have collectively made the fdi in retail sector quite easy and smooth. Our services are easily and economically available for the following ways of fdi in indian retail.

The fdi in india's retail business can be made through any of the following routes:

* Joint Ventures
* Franchising
* Sourcing of Supplies from small-scale sector
* Cash and Carry Operations
* Non-Store Formats

Though opposed to FDI in multi-brand retail, BJP favours foreign investment in other sectors, party chief Nitin Gadkari has said. After his party's agitation over the last few weeks over retail FDI, on Tuesday, he ironically called for creating an investor-friendly atmosphere. "FDI has stopped coming in the country. Whatever had come is going back. Indian industry is taking its investment out of the country. The atmosphere in the country is not friendly for industrial investment. The nation has to be made friendly to capital investment in industry. FDI in various sectors has to be brought in the country," Gadkari told party youth workers on 'politics of development'. The party, which has pledged its resistance to FDI in multi-brand retail, has been trying to send the message that it was not against reforms. At the same time, it stressed that reform cannot be delinked from social equitability. Gadkari was critical of the presence of government in various sectors like textiles, steel, airlines, railways and mining. Suggesting a mechanism for conducting a 'performance audit' of the government and political parties, he said this could amplify development efforts. "Performance audit is required to be enforced in this country...This should be there even for parties...There is need for a strong political will, development-oriented approach and team spirit, especially among politicians," he said. Madhya Pradesh Chief...
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