This research paper focuses on the various perspectives shared by consumers and retailers on FDI coming into the Indian retail sector. The research paper also determines whether India is ready to accept FDI in Indian retail sector.| Submitted to:Prof. Neena Nanda|
Submitted by:MMS - BGroup No. 6Saurabh Kapoor - 115Monica Mandyani - 117Umang Patel - 129Prachi Shah - 144Bhavik Solani - 152Nilesh Vaghela - 155Hiral Vakharia - 156|
This research is based on the question “FDI in retail: Is India ready?” The scope of the research includes finding the effect of allowing FDI in multi-brand retail on local retailers, consumers and to an extent the farmers or agriculturalists. The literature used for the research includes 4 research papers and 3 articles related to the subject. The research papers cover various issues including the strategic implications of the government’s decision to allow FDI in multi-brand retail and states some pre-requisites for its execution. The main advantages seen are job creation for rural India and greater efficiency and investment in back-end supply chain, cold storage and related infrastructure. Another advantage is stated by farmer bodies where they point out that allowing FDI in retail with a certain framework in place will help farmers with a fixed purchase of their produce at best prices. Middlemen will be eliminated and the farmers will be able to deal directly with the retailer. Such exposure may also open up the international market for Indian farmers. The questionnaire used for the research purpose aims to gather data about the opinion on FDI in retail and the role it plays in the development of the country. It tries to gauge the opinion of the respondents regarding the effect on consumers and local retailers. The aim of this survey is to make a comparison between the aspects of the consumer and the local retailer and what benefit they would derive from FDI in multi-brand retail in India. The survey allows us to use close-ended as well as open-ended questions which have helped to analyse the opinions gathered. The sample size is 52. The research also includes certain findings and recommendations derived from the secondary and primary data used in the process.
2. Literature Review
3.1 Research Papers
3.2.1 FDI in Indian Retail - Beneficial or Detrimental Scope:
This research was undertaken in order to answer what attracts foreign investors to India. The research scope covered the arguments that are in favour of as well as against FDI in retail sector. The research also took into consideration the opinion of various other researchers about FDI in retail being beneficial or detrimental. Target Audience:
This report through a comparative study targets various foreign investors who envision the Indian Retail industry as an opportunity. The research also suggests the government with various measures that could be applied before bringing foreign investment in Indian Retail. Findings:
The research findings tell about both positive and negative effects of FDI in retail on the Indian economy. The research concludes that foreign investment should be encouraged to keep pace with the global economy. But also a framework should be redesigned in order to take care of its negative impact on local players’. Some suggestions provided by the research are:
* FDI could be encouraged as a Joint venture only if a product category creates a total threat. * Those products where Indian players are established FDI encouragement should be avoided as it would be detrimental to local players. * There should be some restrictions on the type & number of stores coming through FDI.
3.2.2 Foreign Direct Investment in Indian Retail Sector: Strategic issues and implications Scope:
This paper analyses the Indian retail sector, the growth expected in the sector and the challenges in it....