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International Journal of Multidisciplinary Research Vol.2 Issue 6, June 2012, ISSN 2231 5780

*Assistant Professor, Department of EAFM, University of Rajasthan. Jaipur. **Assistant Professor, Subodh Institute of Management & Career Studies, Jaipur.

ABSTRACT Retailing is the interface between the producer and the individual consumer buying for personal consumption. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. This paper tries to establish the need of the retail community to invite FDI in multi brand retailing. In between the advocators and antagonists of FDI inflows in Indian retailing, there are few issues to be addressed for the consumers‘ rights to be saved, for the employment opportunities to be generated, for the regularization of the different retailers working in different areas, etc. In spite of so many reasons behind allowing and not allowing FDI from entering our Indian borders, there are few examples of other developing countries who initially protested against the entry of foreign investment in retail sector and then, later on proved out to be the most effective decision in country‘s development and standing in the world. The final decision is yet to be taken by the Indian Government for the same. KEYWORDS: Foreign Direct Investment (FDI), Single brand retailing, multi brand retailing, multi-brand retail, Foreign retail investors. ______________________________________________________________________________ INTRODUCTION India is a land of retail democracy- hundreds of thousands of weekly haats and bazaars are located across the length and breadth of our country by people‘s own self-organizational capacities and interests. Our streets are bazaars – lively, vibrant, safe and source of livelihood for millions. India has the shop density of 11 outlets per 1000 people and number around 15 million, giving India the highest retail outlet density in the world. But only four per cent of them have larger than 500 square feet area. Food constitutes 70 per cent of retail sector, which means it has a direct link with the rural economy. Our retail democracy is characterized by 1. High levels of livelihood in retail with nearly 40 million employed which accounts for 8% of the employment and 4% of the entire population. 2. High levels of self - organization.


International Journal of Multidisciplinary Research Vol.2 Issue 6, June 2012, ISSN 2231 5780

3. Low capital input 4. High levels of decentralization The Indian retail market, variously estimated at $400-450 billion, is dominated by the highly decentralized unorganized sector. The small retail outlets, most of them family-owned businesses, account for about 95 per cent of the sales. The creaky, old distribution system that India has lived with is grossly inefficient. The Indian farmer typically gets only a third of what the final consumer pays, instead of the two-thirds that his counterparts do in countries that have organized retailing. India is the second largest producer of fruits and vegetables in the world, but almost 30 per cent of these go waste for want of storage and processing facilities. It is generally agreed that the bulk of the Indian economy would gain, significantly, from the emergence of a well-capitalized retail industry. The organized retail industry is one of the sunrise sectors with huge growth potential. Total retail market in India which currently stood at USD 400 billion in 2009-10, is estimated to attain USD 573 billion by 2012-13. Organized retail industry accounts for only 5% of total retail industry but is expected to reach 10% by 2012 1. POLICY INITIATIVES: Retailing is the largest private sector industry in the world economy with the global industry size exceeding $6.6 trillion and a latest survey has...
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