The Retail Sector is the economic sector that deals comprehensively and exclusively with selling and merchandising of the finished goods and products to the final end-users, both directly and indirectly. As India is the second most populous country, and one of the major and influential economies of the world, its retail business sector is rather vast and diversified. Presently, the retail sector of India contributes about 15% of its national GDP, and employs an enormous number of its people at varying hierarchy. But, a major proportion of this retail sector of India is un-organized. According to well-informed and visionary economists, this retail sector of India is to reach the level of over $650 billion by the year 2015, assisted by rapid developed in the organized retail sector which would then contribute over $100 billion of this amount. Hence, India is becoming famous fast as one of the hugely profitable and secure destinations in the world for fdi in retail business sector. World-famous retailers of USA and the European countries, such as Walmart (USA), Metro (Germany), Carrefour (France), and Tesco (UK), etc., are planning to establish their ornate network soon in major cities of all across India. On the whole, the foreign direct investment in retail in india is expected to flourish abundantly in the near future. More information about fdi in retail in india, together with pros and cons of fdi in retail, is given in the section below.
According to veteran economists and expert analysts, there are certain inherent pros and cons of fdi in the retail sector of India, which are described in the following paragraphs.
The positive and advantageous things associated with fdi in retail sector of India, are - faster development in the organized part of the retail industry; increased facilities and convenience to customers; emergence of a highly refined retail industry at par with that of most developed countries of the world; better opportunities to companies for the best possible and profitable selling and merchandising of their diverse products; industries and companies of all major economic sectors will be hugely benefited for desired business progress and growth.
On the other hand, negative and harmful aspects of fdi in retail in india, are - bulk part of the Indian market will be covered by products of foreign companies, which may result in eventual monopoly of such companies; domestic companies will confront intense business competition; a large number of people and professionals engaged in the retail sector of India will then be jobless and unemployed; it may cause the closure of a large number of small-scale industries, companies, and marketing agencies.