The Advent of New Reform in the Indian Retail Industry: ‘FDI in Multi Brand Retail'-Boon or Bane?

Abstract

Over the last two decades , there has been a fabulous increase in growth of FDI in the global economic background coupled with the tremendous changes in the pattern of consumers spending. Earlier, the consumers especially the Indian consumers used to purchase the bare necessities and were satisfied. But, today there is a massive euphoria of spending and shopping due to the increased incomes and standard of living. The Indians are spending like ever before. Organized retail with its shopping malls and supermarkets culture is adding fuel to this. Organised retail is growing at an impressive rate of 35% to 40% in the last few years, and thus is a lucrative option for foreign companies to invest in. But allowing FDI in multi-brand in india has generated ecstasy for some whereas fear for others. Proponents support the reform by stating that it will lead to upgradation of technology, managerial skills and infrastructure ,will build supply chain and help farmers and thereby nation on the whole. But opponents reject the ideas by stating that it will lead to massive unemployment, monopolization of the sector and will only harm the farmers . They also add the concerns about the distortion of urban cultural development.

This paper seeks to explore the prospects of FDI in multi brand retailing in INDIA. The paper firstly speaks about the concept of FDI in multi brand retailing , its need in the current scenario. And the second part deals with the merits and demerits of allowingthis reform coupled with its challenges & threats. The last part overviews with some recommendations for allowing this reform.