| Abstract | | | | Others |
| | | | 2,612,618 |
| In recent years the destination sectors in FDI have | | | | Total Worldwide |
| became more varied. FDI inflows have shifted from | | | | 3,900,000 |
| infrastructure, natural resources and export driven | | | | Source: Extracted from M+M Planet Retail |
| manufacturing to other areas such as retailing, | | | | Arguments in favour of FDI in Retailing |
| tourism, construction and off shore services. A World | | | | FDI in retailing is favoured on following grounds: |
| Bank study showed that cumulative FDI inflows to | | | | (1) The global retailers have advanced management |
| the retail sector in the 20 largest developing countries | | | | know how in merchandising and inventory |
| amounted to US$ 45 billion in 1998-2002 (about 7 per | | | | management and have adopted new technologies |
| cent of the total of these countries). The study | | | | which can significantly improve productivity and |
| showed that after liberalization; countries such as | | | | efficiency in retailing. (2) Entry of large low-cost |
| Brazil, Poland and Thailand have received significant | | | | retailers and adoption of integrated supply chain |
| FDI in retailing. | | | | management by them is likely to lower down the |
| In spite of the recent developments in retailing and | | | | prices. (3) FDI in retailing can easily assure the quality |
| its immense contribution to the economy, retailing | | | | of product, better shopping experience and customer |
| continues to be are the least evolved industries and | | | | services. (4) They promote the linkage of local |
| the growth of organised retailing in India has been | | | | suppliers, farmers and manufacturers, no doubt only |
| much slower as compared to rest of the world. Over | | | | those who can meet the quality and safety |
| a period of 10 years, the show of organised retailing | | | | standards, to global market and this will ensure a |
| in total retailing has grown from 10 per cent to 40 | | | | reliable and profitable market to these local players. |
| percent in Brazil and 20 percent in China, while in India | | | | (5) As multinational players are spreading their |
| it is only 2 per cent (between 1995-2005). One | | | | operation, regional players are also developing their |
| important reason for this is that retailing is one of the | | | | supply chain differentiating their strategies and |
| few sectors where foreign direct investment is not | | | | improving their operations to counter the size of |
| allowed. Within the country, there have been | | | | international players. This all will encourage the |
| protests by trading associations and other | | | | investment and employment in supply chain |
| stakeholders against allowing FDI in retailing. On the | | | | management. (6) Joint ventures would ease capital |
| other hand, the growing market has attracted foreign | | | | constraints of existing organised retailers and (7) FDI |
| investors and India has been portrayed as an | | | | would lead to development of different retail formats |
| important investment destination for the global retail | | | | and modernisation of the sector. |
| chains. The present paper attempts to analyze the | | | | Arguments against FDI in Retailing |
| reason why foreign retailers are interested in India, | | | | Many trading associations, political parties and industrial |
| the strategies they are adopting to enter India and | | | | associations have argued against FDI in retailing due |
| there prospects in India | | | | to following reasons: |
| | | | (1) Indian retailers have yet to consolidate their |
| | | | position. The existing retailing scenario is characterized |
| After the waves of globalisation, liberalisation and | | | | by the presence of a large number of fragmented |
| privatisation marketing scenario particularly retailing | | | | family owned businesses, who would not be able to |
| has changed radically. These changes have resulted in | | | | survive the competition from global players. |
| emergence of new environment for buyers’ | | | | (2) The examples of south east Asian countries |
| behaviour and purchasing habits. The upper and upper | | | | show that after allowing FDI, the domestic retailers |
| middle strata of the society now prefers to purchase | | | | were marginalised and this led to unemployment. |
| well established branded goods from standard | | | | (3) FDI in retailing can upset the import balance, as |
| showrooms and it has transformed the entire picture | | | | large international retailers may prefer to source |
| and perception not only in the metro cities but almost | | | | majority of their products globally rather than |
| in all big cities of our country. It is worth mentioning | | | | investing in local products. |
| that retailing in India has been hailed as one of the | | | | (4) Global retailers might resort to predatory pricing. |
| sun-rise sectors in the economy. According to A. T. | | | | Due to their financial clout, they often sell below cost |
| Kearney, a well known International Management | | | | in the new markets. Once the domestic players are |
| Consultant, “India is the second most | | | | wiped out of the market foreign players enjoy a |
| attractive retail designation globally, among thirty | | | | monopoly position which allows them to increase |
| emergent markets.” Till now unorganised | | | | prices and earn profits. |
| retailing sector was dominating retail trade in India by | | | | (5) Indian retailers have argued that since lending |
| constituting 98% of all retailing trade but now not | | | | rates are much higher in India, Indian retailers, |
| only traditional Indian retailers but giant Indian retailers | | | | especially small retailers, are at a disadvantageous |
| like Reliance has entered in the area and is planning to | | | | position compared to foreign retailers who have |
| expand its activities in this sector in a big wag. Even | | | | access to International funds at lower interest rates. |
| world renowned retailing organisation like Wal-Mart | | | | High cost of borrowing forces the domestic players |
| has decided to enter in India via joint venture with | | | | to charge higher prices for the products. |
| Bharti and French retailer Carrefour is busy in chalking | | | | (6) FDI in retail trade would not attract large inflows |
| out strategy to enter the hyper market and | | | | of foreign investment since very little investment is |
| supermarket retail format in India through Dubai | | | | required to conduct retail business. Goods are bought |
| based retail major Landmark group. | | | | on credit and sales are made on cash basis. Hence, |
| In this context an effort has been made in this paper | | | | the working capital requirement is negligible. On the |
| to review the emergence of global retailers in India, | | | | contrary; after making initial investment on basic |
| to examine the govt. policy relating to FDI in retailing | | | | infrastructure, the multinational retailers may remit |
| and to evaluate the prospects of global retailing in | | | | the higher amount of profits earned in India to their |
| India. | | | | own country. FDI in Retailing in India - Policy and |
| Why Global Retailers are Interested in India? | | | | Entry Routes |
| More specifically the global players are interested in | | | | In India, till recently, FDI was not allowed in retailing, |
| India due to following reasons: | | | | but the Union cabinet on January 24, 2006 |
| I) Strategic Location & Geography: India enjoys | | | | rationalised and simplified the FDI policy and allowed |
| unique geographical advantage. It is strategically | | | | the contentious issue of foreign investment in retail |
| located in Asia with access to all leading markets of | | | | sector by allowing FDI up to 51 percent with prior |
| the World. With total area of 32, 87,590 Sq. Km, | | | | government approval for retail trade in single brand |
| Coastline of 7000 Km and borders with six countries | | | | products. This would imply that foreign companies |
| India becomes most promising destination for the | | | | would be allowed to sell goods sold internationally |
| foreign direct investment. | | | | under a single brand, viz. Reebok, Nokia, Adidas. |
| II) Versatile Demographics: Demographically with a | | | | Retailing of goods of multiple brands, even if such |
| population of more than 1.1 billion and diverse culture, | | | | products are produced by same manufacturer would |
| India is a land of all seasons. India presents a real | | | | not be allowed. However, there are indications that |
| cosmopolitan population with diverse religions and | | | | the Government may allow foreign investments in |
| culture. Hinduism, Buddhism, Jainism, Sikhism, | | | | retail segments where small domestic players do not |
| Christianity and Islam are the main religions of India. | | | | operate. The Department of Industrial Policy and |
| This variety of religions provides India with a diverse | | | | Promotion is preparing a detailed policy for further |
| culture. Besides, India has versatile population of | | | | liberalisation of FDI in the country, which is likely to |
| urban and rural nature. This versatility of population | | | | be announced before the budget 2007-08. As part of |
| makes India a ready made market for foreign | | | | the proposed move, the Ministry has marked out |
| retailers. | | | | sports goods, electronics and building equipment as |
| III) Vast growing Economy: On economic front, India | | | | some of the sectors that may be opened up with a |
| the largest democracy of the world, have a stable | | | | 51% cap on FDI. The government is also considering |
| Govt. with robust programme of economic reforms. | | | | to permit multi-brand retail in such areas. The |
| India with a foreign exchange reserve of more than | | | | government is likely to discuss the matter with the |
| US $120 billion, FDI of more than US $9.9 billion | | | | left parties before taking a final call on the issue. The |
| ,average GDP growth of more than 7% per annum, | | | | Left has initially stalled the government’s plans |
| rupee appreciation Vs U.S dollar of more than 2% in | | | | to allow FDI in multi-brand retail on the grounds that |
| last two years and with a rapidly growing investment | | | | it will adversely affect mom-and-pop stores. |
| in infrastructure has all the ingredients of a emerging | | | | It is worth mentioning that FDI restrictions have not |
| economic super power. India is tipped to be third | | | | deterred prominent international players from entering |
| largest economy in terms of GDP by the year 2050 | | | | India. Many U.S and other international retailers and |
| (Table 1) | | | | consumer goods companies consider India a |
| | | | top-priority market with the potential for |
| Table 1: Forecast of GDP ($ Trillion) | | | | breakthrough growth. In this context (a) Wal-Mart |
| Country | | | | CEO, John Menzar visited India in 2005 and met with |
| 2010 | | | | Prime Minister to discuss relevant issues. |
| 2050 | | | | Wal-Mart’s sourcing from India, which was |
| China | | | | U.S.$300 million in 2004 reached to U.S.$1.2 billion in |
| 3.0 | | | | 2005.(b) Fashion brand DKNY is set to foray into |
| 44.5 | | | | Indian fashion industry through franchise agreement |
| U.S.A | | | | with Indian company, S. Kumar’s. (c) Tommy |
| 13.3 | | | | Hilfiger, International fashion icon says that |
| 35.2 | | | | “We are going to build a wonderful lifestyle |
| India | | | | business here” (d) Phillip Morris is ready to |
| 0.9 | | | | unveil its plans for kraft in India through Kraft Jacob |
| 27.8 | | | | Suchard (KJS) India, a wholly owned arm of Philip |
| Japan | | | | Morris India (e) Starbucks has expressed its interest |
| 4.6 | | | | in entering India through the franchise route. |
| 6.7 | | | | Although before January 24, 2006 FDI was not |
| Brazil | | | | allowed in retailing, many international players are |
| 0.7 | | | | operating in the country. Some of entry routes |
| 6.1 | | | | employed by them are discussed in details as below: |
| Russia | | | | (a) Manufacturing and Local Sourcing: Companies that |
| 0.8 | | | | set up manufacturing facilities are allowed to sell the |
| 5.9 | | | | products in the domestic market. Consumer durable |
| U.K. | | | | companies such as Sony and Samsung have entered |
| 1.9 | | | | the retail sector through this route. Due to high labour |
| 3.8 | | | | cost in their domestic market, many international |
| Germany | | | | brands are setting up manufacturing bases in |
| 2.2 | | | | developing countries such as India and China and / or |
| 3.6 | | | | are sourcing products from local manufacturers. For |
| Italy | | | | example, Levi's and Tommy Hilfiger are sourcing |
| 1.3 | | | | products from Indian manufacturers like Arvind Mills. |
| 2.1 | | | | Benetton has a manufacturing unit in India. Other |
| Source: McKinsey Quarterly Nov.04 | | | | international brands like GIVO from Italy have set up |
| In such a scenario every multinational aims to set up | | | | export-oriented manufacturing facilities. These |
| a base in India, not to participate in Indian growth | | | | companies are allowed to sell products to Indian |
| story, rather to build their own future. | | | | consumers through franchising, local distributors, |
| IV) Retailing: The Emerging Revolution: Retailing is the | | | | existing Indian retailers, own outlets, etc. |
| largest private industry in India and second largest | | | | |
| employer after agriculture. The sector contributes to | | | | (b) Franchising: Franchising is the most preferred |
| around 10 percent of GDP. With over 12 million retail | | | | mode through which foreign players have entered |
| outlets, India has the highest retail outlets density in | | | | the Indian market. It is the easiest route to enter the |
| the world. This sector witnessed significant | | | | Indian market. Franchising is often used as a mode to |
| development in the past 10 years from small | | | | expand the market of a particular retail enterprise |
| unorganized family owned retail formats to organized | | | | outside domestic economy since it allows firms to |
| retailing. Liberalization of the economy, rise in per | | | | expand without investing their own capital, is based |
| capita income and growing consumerism has | | | | on local expertise and enables firms to curb local |
| encouraged large business and venture capitalist in | | | | oppositions and regulations. This is the most common |
| investing in retail infrastructure. The importance of | | | | mode for entry of fast food chains across the world. |
| retail sector in India can be judged from following | | | | Apart from fast food chains like Pizza Hut, players |
| facts (a) Retail sector is the largest contributor to | | | | such as Lacoste, Mango, Nike and Marks and |
| the Indian GDP (b) The retail Sector provides 15% | | | | Spencer, have entered the Indian market through |
| employment (c) India has world largest retail network | | | | this route. |
| with 12 million outlets (d) Total market size of retailing | | | | For setting up franchising operation, the foreign |
| in India Is U.S $ 180 billion (e) Current Share of | | | | players are required to take permission from the |
| Organized Retailing is just 2% which comes around to | | | | Reserve Bank of India (RBI). RBI often imposes the |
| $3.6 trillion (f) Organized retail sector is growing @ | | | | condition that franchisers have to bring in foreign |
| 28% per annum. | | | | investment and set up a base for carrying on |
| V) Indian Retailing: Opportunities Unexplored: India is | | | | operational activities. A foreign franchiser not wishing |
| sometimes referred to as the nation of shopkeepers. | | | | to make a direct investment would have to render |
| This is because the country has the highest density | | | | technical assistance to the franchisee. Some |
| of retail outlets - over 12 million. However, unlike | | | | franchisee, such as Pizza Hut has made significant |
| most developed and developing countries, Indian retail | | | | investment in the supply chain. |
| sector is highly fragmented and bulk of the business | | | | The arrangements between franchisee and franchiser |
| is in the unorganized sector. As compared to China | | | | are found to be extremely flexible and are based on |
| (Table 2) the presence of global players in India is | | | | negotiation between the two. Some Indian |
| very less | | | | franchisees have complained about high franchising |
| Table 2: Number of Foreign Retailers in India & | | | | fees together with high real estate costs, high import |
| China | | | | duties and other costs escalate the prices. For |
| Retailer | | | | instance, the cost of a Marks and Spencer product is |
| China | | | | higher than not only the brands produced |
| India | | | | domestically but also in comparison to the price of |
| Wal- Mart | | | | the product in the UK. The high prices restrict the |
| 40 | | | | ability of the foreign players to penetrate the market |
| Carrefour | | | | but they have entered the country to make their |
| 53 | | | | brands visible to the huge Indian market. |
| Tesco | | | | If FDI is allowed in retailing, franchisees are not very |
| 30 | | | | sure whether they would hold the retailing rights for |
| Metro | | | | the brands. According to industry representatives, |
| 21 | | | | since franchisees largely constitute of domestic |
| 02 | | | | traders (even some unorganised retailers have take |
| KFC | | | | up franchising rights) who have made significant |
| Over 1000 | | | | investment in infrastructure, government through |
| 04 | | | | legislation must ensure that they do not loose out |
| Starbucks | | | | their franchising rights if FDI is allowed in retailing and |
| 70 | | | | the franchisers decide to change the mode of |
| McDonald’s | | | | operation. The existing franchisees have also |
| 580 | | | | expressed an interest in entering into joint venture |
| 47 | | | | with the franchisers if FDI is allowed in retailing. |
| Pizza Hut | | | | (c) Test Marketing: Test marketing is another route |
| 110 | | | | through which many foreign players have entered |
| 75 | | | | the Indian market. Foreign investment Promotion |
| Louis Vuitton | | | | Board (FIPB) allows foreign companies for test |
| 06 | | | | marketing of their products for a two-year period by |
| 2 | | | | the end of which they are required to set up |
| Prada | | | | manufacturing facilities in India. Direct selling |
| 10 | | | | companies like Amway and Oriflame entered the |
| B&Q | | | | Indian market through this route. Initially, Amway got |
| 20 | | | | an approval for test marketing for a period of two |
| Hugo Boss | | | | years but they managed to secure an extension of |
| 60 | | | | one more year. At the end of the third year, they |
| 02 | | | | set up contract manufacturing facilities and brought in |
| Source: McKinsey Quarterly Nov.04 | | | | foreign investment and technical know-how. Oriflame |
| India in such a scenario presents following facts to | | | | too extended its test marketing license for a third |
| foreign retailers: | | | | year and at the end of which had set up a |
| - There is a huge, huge industry with no large players. | | | | manufacturing facility in Noida (UP) for producing |
| Some Indian large players have entered just recently | | | | certain specific products. Other products are |
| like Reliance, Trent | | | | imported and would continue to be imported from |
| - India can support significant players averaging $1 bn. | | | | abroad. |
| in Grocery and $0.3- 0.5 bn. in apparel within next ten | | | | Nokia came to India through the test marketing |
| years. | | | | route in mid-1990s. Initially they got a license for two |
| - The transition will open multiple opportunities for | | | | years to test their products in the Mumbai circle. |
| companies and investors | | | | After three months of their entry they tied up with |
| In addition to the above, improved living standards | | | | the service providers to provide integrated services |
| and continuing economic growth, friendly business | | | | to their customers. Due to pressure from the FIPB, |
| environment, growing spending power and increasing | | | | Nokia had tied up with the HCL Infotech as a |
| number of conscious customers aspiring to own | | | | strategic partner for all India distribution of Nokia |
| quality and branded products in India are also | | | | products. After the success of its products in the |
| attracting to global retailers to enter in Indian market. | | | | country, Nokia had opened up an office but had not |
| | | | set up a manufacturing facility and continued to |
| Major Global Players in Retailing: The top 30 global | | | | import all products (even models made specifically for |
| retailers together with their percentage of sale from | | | | India). After another two years they divided the |
| grocery and the percentage of sales in domestic and | | | | country into four zones and entered into a strategic |
| foreign markets for the year 2003 are given in Table | | | | alliance for distribution with Supreme for East and |
| 3. | | | | West India while HCL continued with North and |
| | | | Southern zone. Nokia had also applied for the cash |
| Table 3: Top 30 Global Retailers with their Sales in | | | | and carry license from the FIPB and has recently got |
| Grocery and Percentage | | | | the license. Nokia is aggressively targeting the Indian |
| Share of Domestic and Foreign sales in Total Retail | | | | consumers and plan to capture 75 percent of the |
| Sales, 2003 Rank | | | | mobile market in the next seven years. The |
| Company | | | | company, which currently operates as a wholesale |
| Country of Origin | | | | cash-and carry, recently announced that it would set |
| Net Sales 2003 (USD mn) | | | | up manufacturing facilities very soon. |
| Grocery Sales (%) | | | | The test marketing route allows foreign players to |
| Domestic Sales(%) | | | | test the demand for their products in Indian market |
| Foreign Sales(%) 1. | | | | before undertaking investment. Even if FDI is allowed |
| Wal-Mart | | | | in retailing, many foreign players would like to enter |
| USA | | | | the Indian market through this route. |
| 256,329 | | | | |
| 43.7 | | | | (d) Wholesale Cash-and-Carry Operation: This is the |
| 79.1 | | | | route through which large international retailers such |
| 20.9 2. | | | | as Germany's Metro Cash & Carry GmbH and |
| Carrefour | | | | Shoprite Checkers of South Africa have entered the |
| France | | | | Indian market. The wholesale cash-and-carry |
| 79,609 | | | | operation is defined as any trading outlets where |
| 77.4 | | | | goods are sold at the wholesale rate for retailers and |
| 50.7 | | | | businesses to buy. The transactions are only for |
| 49.3 3. | | | | business purposes and not for personal consumption |
| Ahold | | | | as in the case of retailing. |
| Neth. | | | | (e) Distributor: Companies such as Swarovski and |
| 63,325 | | | | Hugo Boss have set up distribution offices in India |
| 84.0 | | | | and these offices supply the products to local |
| 15.8 | | | | retailers. All products of Hugo Boss are imported and |
| 84.2 4. | | | | distributed through the company's distributor. |
| Metro Group | | | | (f) Special Cases: The Sri Lankan retailers have |
| Germany | | | | entered the India market through the initiatives of |
| 60,532 | | | | Export Development Board of Sri Lanka (EDB) which |
| 50.5 | | | | obtained special permission from the RBI to set up |
| 52.9 | | | | retail operations in India. The EDB has leased 17 retail |
| 47.1 5. | | | | outlets in Spencer Plaza in Chennai in which Sri Lankan |
| Kroger | | | | retailers are showcasing and selling their products. |
| USA | | | | The Sri Lankan products showcased in these stores |
| 53,791 | | | | are mostly at the higher end of the quality spectrum |
| 70.2 | | | | and can be brought into the country free of duty. |
| 100.0 | | | | This gives an advantage to large Sri Lankan retailers |
| 0.0 6. | | | | like Hameedia not only to establish a global presence |
| Tesco | | | | but also to access the large customer base of India |
| UK | | | | at competitive prices. The EDB is also exploring the |
| 50,326 | | | | possibilities of setting up similar trade centres in other |
| 74.6 | | | | cities like Delhi and Mumbai. Although this mode has |
| 80.1 | | | | allowed retailers from Sri Lanka to enter the Indian |
| 19.9 7. | | | | market without domestic manufacturing and sourcing |
| Target | | | | conditions and some products sold by these traders |
| USA | | | | are similar to those sold by Indian retailers, EDB did |
| 48,163 | | | | not face any opposition from Chambers, retailers and |
| 17.8 | | | | the trading houses. |
| 100.00 | | | | Although the official policy is that FDI in retailing is |
| 0.0 8. | | | | allowed only in one brand and that too up to 51% in |
| Rewe | | | | retailing, but it has not acted as an entry barrier. |
| Germany | | | | Foreign players have a substantial presence in the |
| 44,251 | | | | country and have used several alternative unique |
| 7.6 | | | | routes to enter Indian Trading Sector. Some of the |
| 71.4 | | | | existing foreign players are listed below in table 4. |
| 28.6 9. | | | | Table 4: Some Existing Foreign Players and |
| Aldi | | | | Prospective Entrants Retailers |
| Germany | | | | Type |
| 41,011 | | | | Status |
| 83.6 | | | | 7-Eleven |
| 63.0 | | | | Supermarket |
| 37.0 11. | | | | Evaluating |
| ITM(Intermarche) | | | | Amway |
| France | | | | Direct selling |
| 37,723 | | | | Already in |
| 77.3 | | | | Auchan |
| 72.2 | | | | Hypermarket |
| 27.8 12. | | | | Evaluating |
| Safeway(USA) | | | | Carrefour |
| USA | | | | Multi-format retailer |
| 35,552 | | | | Wait and watch |
| 75.5 | | | | Dairy Farm |
| 85.3 | | | | Multi-format retailers |
| 14.7 13. | | | | Tied up with RPG |
| Schwarz Group | | | | JC Penny |
| Germany | | | | Product sourcing |
| 33,357 | | | | Already in |
| 83.0 | | | | Landmark |
| 66.2 | | | | Department Store |
| 33.8 14. | | | | Already in |
| Schwarz Group | | | | Lee Cooper |
| Germany | | | | Product sourcing |
| 33,357 | | | | Already in |
| 83.0 | | | | Levi's |
| 66.2 | | | | Product sourcing |
| 33.8 15. | | | | Already in |
| Walagreens | | | | Mango |
| USA | | | | Apparel retailer |
| 32,505 | | | | Already in |
| 380 | | | | Marks & Spencer |
| 100.00 | | | | Department Store |
| 0.0 16. | | | | Already in |
| Auchan | | | | Metro |
| France | | | | Cash & carry |
| 32,422 | | | | Already in |
| 57.2 | | | | Oriflame |
| 57.5 | | | | Direct selling |
| 42.5 17. | | | | Already in |
| AEON | | | | Reebok |
| Japan | | | | Oint venture |
| 30,574 | | | | Already in |
| 47.2 | | | | Shoprite |
| 91.7 | | | | Wholesale cash-and-carry and franchising |
| 8.3 18. | | | | Already in |
| Ito-Yokado | | | | Sony |
| Japan | | | | Manufacturer Retailer |
| 30,541 | | | | Already in |
| 62.5 | | | | Wal-Mart |
| 73.8 | | | | Hypermarket |
| 26.2 19. | | | | Agreement with Bharti |
| Edeka | | | | Source: FDI in Retail Sector, Department of |
| Germany | | | | consumer affairs, Government of India, p. 115. |
| 29,670 | | | | Conclusion |
| 83.8 | | | | It is evident that ever growing urban and rural |
| 91.2 | | | | markets in India represent an unprecedented and |
| 8.8 20. | | | | vast unexplored opportunity for retailing to all types |
| Sainsbury | | | | of formats. Initially there may be certain reservations |
| UK | | | | and apprehensions in allowing global players in |
| 27,995 | | | | India’s retailing but if they are allowed in a |
| 73.3 | | | | phased manner on the basis of a well conceived and |
| 85.1 | | | | chalked out policy, they are likely to lead to more |
| 14.9 21. | | | | investment in organized retailing and allied sectors. As |
| Tengelmann | | | | already discussed, it would also lead to inflow of |
| Germany | | | | latest technical know how, establishment of well |
| 27,721 | | | | integrated and sophisticated supply chains, availability |
| 69.7 | | | | of standard, latest and quality products, help in up |
| 49.1 | | | | gradation of human skills and increased sourcing from |
| 50.9 22. | | | | India. Yet the following points may be kept into |
| Leclerc | | | | consideration in this context: |
| France | | | | 1. Since the Indian retail sector is highly fragmented |
| 27,332 | | | | and domestic retailers are in the process of |
| 59.9 | | | | consolidating their position, the opening up of FDI |
| 95.7 | | | | regime should be in phased manner over 5 to 10 |
| 4.3 23. | | | | years time frame so as to give the domestic retailers |
| CVS | | | | enough time to adjust changes. |
| USA | | | | 2. FDI should not be allowed for multi brand stores in |
| 26,588 | | | | near future, as Indian retailers will not be able to face |
| 31.2 | | | | competition with these stores immediately. |
| 100.0 | | | | 3. At present it is also not desirable to increase FDI |
| 0.0 24. | | | | ceiling to more than 51% even for single premium |
| Casino | | | | brand stores. It will help us to ensure check and |
| France | | | | control on business operations of global retailers and |
| 25,958 | | | | to protect the interests of domestic players. |
| 73.3 | | | | However, the limit of equity participation can be |
| 58.9 | | | | increased in due course of time as we did in telecom, |
| 41.1 25. | | | | banking and insurance sectors. |
| Kmart | | | | 4. Foreign players should not be allowed to trade in |
| USA | | | | certain sensitive products like arms and ammunition, |
| 23,253 | | | | military equipment, etc. and the list of excluded |
| 14.0 | | | | products should be clearly stated in the FDI policy. |
| 100.0 | | | | 5. Generally super markets and hyper markets should |
| 0.0 26. | | | | not be allowed in the mid of city so as to protect |
| Delhaize Group | | | | the existence of unorganised or comparatively |
| Belgium | | | | medium sized retail organizations. |
| 21,256 | | | | The strategy of opening up should be backed by |
| 77.1 | | | | appropriate reform measures. India can learn from |
| 20.1 | | | | the experiences of other developed and developing |
| 79.9 27. | | | | countries and develop its own strategies, laws and |
| Loblaw | | | | regulations that would be in the best interest of the |
| Canada | | | | country. As of now, there is no proper definition of |
| 18,002 | | | | retailing or retail formats in India. International players |
| 77.5 | | | | are exploiting the situation and are often entering the |
| 100.0 | | | | market and expanding their businesses through |
| 0.0 28. | | | | multiple routes and are operating in the country with |
| JC Penney | | | | more than one format of retailing. The regulatory |
| USA | | | | regime should address these issues. The entry norms |
| 17,786 | | | | should clearly state the approval requirements, |
| 16.9 | | | | conditions / restrictions if any imposed, etc. The |
| 99.4 | | | | government should also strictly enforce the quality |
| 0.6 29. | | | | standards for local production and imports. |
| Coles Myer | | | | References |
| Australia | | | | 1. FDI in Retail Sector in India, Department of |
| 17,523 | | | | Consumer Affairs, Ministry of Consumer Affairs, |
| 58.5 | | | | Public and Food Department, Government of India. |
| 99.4 | | | | 2. U.S. Department of Labour, Bureau of Labour |
| 0.6 30. | | | | Statistics. http//stats.bls.gov/iag/whole retailtrade.htm |
| Daiei | | | | 3. |
| Japan | | | | 4. The Earth Institute of Columbia University. |
| 17,158 | | | | 5. The World Bank Group Website : |
| 43.3 | | | | 6. Swapna Pradhan: Retailing Management, The |
| 98.9 | | | | McGraw-Hill Companies(2007) |
| 1.1 | | | | 7. Chetan Bajaj, Rajnish Tuli & Nidhi Srivastav: |
| Total Top 30 | | | | Retail Management, Oxford University Press (2006) |
| 1,287,382 | | | | 8. |