FDI in India: Single-brand and Multi-brand Retail
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Case Code: ECON053 Case Length: 15 Pages Period: 1950-2015 Pub Date: 2017 Teaching Note: Not Available |
Price: Rs.400 Organization : - Industry : Macro Economics Countries : India Themes: FDI in India |
Abstract Case Intro 1 Excerpts
Excerpts
Background of FDI in India
Post independence, the Government of India followed a socialist approach for the economic development of the country. It exercised a high degree of control over industrial activity by imposing rules and regulations. The trade policy focused on import substitution. Financial sector policy did not pay enough attention to generating funds/capital within and outside the country.
These policies led to inefficiencies in the process of manufacturing, high costs of products, non-competitiveness, import controls, and lack of export orientation and acted as disincentives to foreign investors.At that time, Jawaharlal Nehru realized the importance of Foreign Direct Investment (FDI) as a means to attract capital and technological and industrial knowledge to solve the prevailing inefficiencies...
FDI in Retail (1990-2006)
The retail industry in India was highly fragmented and unorganized before the 1990s. Family-owned small stores, popularly known as mom-and-pop stores, were the major players. After the policy of liberalization in 1991, there was a reduction in custom duties and a shift from quota to a tariff-based system.
This led to a more liberal policy toward wholesale trade, franchising, and commission agents’ services. The FDI in retail began after India became a member of the World Trade Organization (WTO) in 1995 and the General Agreement on Trade in Services (GATS), which included the wholesale and retailing services, came into existence...
FDI in Retail (2012-2015)
In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in the Indian retail market with 100% ownership. But it imposed the requirement that the single brand retailer should source 30 percent of its goods from India. In June 2012, Swedish company IKEA applied to invest $1.9 billion in India and set up 25 retail stores...
FDI Policy 2015
The government announced easing of several conditions for single brand retail and e-commerce in 2015 whereas the norms of FDI in multi-brand remained unchanged. This move was taken in order to boost the entire investment environment and to stimulate the inflow of foreign investments in the country, opined experts...
Exhibits
Exhibit I: Industrial Policy 1991
Exhibit II: Key Developments in the Single Brand Retail Sector During 2012 to 2015
Exhibit III:Market Size of Indian Retail Industry
Exhibit IV:Initiatives in the Indian Retail sector (2014-15)
Exhibit V:FDI Inflows from Different Counties
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