Tesco Plc in India
Tesco PLC in India
Many developing countries are emerging markets in which are attractive tons of foreign investors to participate. Like China, Russia, and Brazil, India is one of the most conceivably profitable places. However, in order to have a successful business in such markets, the investors have to consider many factors of those countries such as level of freedom, corruption, competition and risks. In this case, although India has restrictions on foreign direct investment (FDI) in retail trading, it is perceivably a lucrative emerging market for Tesco. Therefore, the issue here is whether Tesco should enter the Indian market. If so, when should be the proper time—before or after the restriction relaxed and with what strategies? Also, should Indian government relax the FDI restrictions in the retail sector? And, what are the advantages that the country will obtain of doing so?
Although the Indian government had allowed foreign direct investment (FDI) in many industries, it is still questionable in retail sectors. That is because the foreign arrival can lead to the end of tons of local small and unorganized players. The Indian retail segment is worth £140 billion annually and over 95% of the retail market is unorganized and uncomputerized family-run stores—kiranas . However, there is a lot of motivation for the Indian government to issue FDI in retailing. First, the current local retail capacities (e.g. logistics systems and warehousing) and knowledge (e.g. supply chain management) of the Indian market are only partially mature. Thus, the coming of Tesco and other expert-global firms will enhance the local infrastructure and supply chain which is one of the current constraints of the Indian market to modern retail practices. For example, lifting the FDI regulation in retail sector would diminish the country’s food dilemma since according to Telegraph.co.uk, up to 40 percent of Indian food produce has rotted annually before reached the market. Moreover, in
Many developing countries are emerging markets in which are attractive tons of foreign investors to participate. Like China, Russia, and Brazil, India is one of the most conceivably profitable places. However, in order to have a successful business in such markets, the investors have to consider many factors of those countries such as level of freedom, corruption, competition and risks. In this case, although India has restrictions on foreign direct investment (FDI) in retail trading, it is perceivably a lucrative emerging market for Tesco. Therefore, the issue here is whether Tesco should enter the Indian market. If so, when should be the proper time—before or after the restriction relaxed and with what strategies? Also, should Indian government relax the FDI restrictions in the retail sector? And, what are the advantages that the country will obtain of doing so?
Although the Indian government had allowed foreign direct investment (FDI) in many industries, it is still questionable in retail sectors. That is because the foreign arrival can lead to the end of tons of local small and unorganized players. The Indian retail segment is worth £140 billion annually and over 95% of the retail market is unorganized and uncomputerized family-run stores—kiranas . However, there is a lot of motivation for the Indian government to issue FDI in retailing. First, the current local retail capacities (e.g. logistics systems and warehousing) and knowledge (e.g. supply chain management) of the Indian market are only partially mature. Thus, the coming of Tesco and other expert-global firms will enhance the local infrastructure and supply chain which is one of the current constraints of the Indian market to modern retail practices. For example, lifting the FDI regulation in retail sector would diminish the country’s food dilemma since according to Telegraph.co.uk, up to 40 percent of Indian food produce has rotted annually before reached the market. Moreover, in