Impact of Fdi on Indian Consumer Goods Retail Industry

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|Impact of FDI on Indian Consumer Goods Retail Industry                                                                       |
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Contents

Abstract 2

Introduction 4

Revised Single and Multi Brand Reatil Trading Policies 6

  Salient Features Single-brand Retail 6
  Salient Features Multi-brand Retail 6
Overview of Indian Retail Sector 8

Impact of FDI: 10

  Impact on Industry and incumebent players 11
  Impact on Farming Communities 15
  Impact on Mom and Pop stores 16
Challenges of Retailing in India 20

  Demographics 20
  Political Uncertainty and Risk 21
  Infrastructure 22
  Fragmented logistics 22
  Human Resources 23
  Real estate and Rent 23
  Administrative & beaurocratic Challenges 23
  Complex Indirect Tax Structure 23
Recommendations 24

Conclusion 27

References 29

Appendices 30





Abstract

The opening up of Indian economy for FDI retail could not have come at right time than this.   Recently, the Indian economy came under heavy criticism for its rampant corruption, high inflation, high interest rates, and henceforth slower GDP growth projection (Crisil & Moody’s revised forecast to 5.5% for 2012-13) against potential of economy to grow at 9%. These macroeconomic factors have affected the sentiment factors of investment of industry powerhouses leading to vicious cycle of economic slowdown. The Government of India, in an effort to control fiscal deficit to target 5.2%, were reluctant to stretch the discretionary spending/investment to boost the investment sentiments of businesses (so called “ waking up the animal instinct of businesses” by Prime Minister Manmohan Singh). GOI was... [continues]

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