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INTRODUCTION:

India’s retail market remains largely out of bounds to large international retailers like

Wal-Mart and Carrefour. By liberalizing FDI in this sector raises the chances about
employment losses, unfair competition which exhibits in large-scale exit of responsibility
domestic retailers and infant industry arguments to protect the organized domestic retail
sector that is at early stage. By the grounds on international evidence, this papers states that
allowing entry by large international retailers into the Indian market my help to overcome
inflation especially in food prices. Warehousing technologies and distribution systems from
foreign firms can improve supply chain efficiency in India, in particular for agriculture
produce.

India is now the last major boundary for globalized retail. In the twenty years since the
economic liberalization of 1991,india’s middle class has greatly expanded, and so has its

Purchasing power. But over the years India has been slow to open its retail sector to foreign
investment.

Foreign direct investment in the retail sector in india is restricted. In 2006,the government
make retail policy for the first time, allowing up to 51% FDI through the single brand retail
route. Since then, there has been a steady increase in FDI In the retail sector, and the
cumulative FDI in single-brand retail stood at $195 million by the middle of 2010
(DIPP,2010).

Foreign investment in the single-brand retail sector in india has been fluctuating the global
economic crisis of 2007-08.

The retail sector in india is organized into three categories (DIPP ) of the government of
india, single-brand retail comprises those retailers selling products “of a single brand”
only.from 2006 to march 2010,around 94 foreign firms applied to invest through the single-
brand of which 57 were approved.

In contrast, no FDI is allowed in the multi-brand retail category. This involves all firms in the
organized retail that seek to stock and sell multiple brands. WAL-MART and Carrefour. This
is the sector that is most under dispute.

The third segment called “cash and carry” refers to wholesale retail. In this segment FDI in
India is permitted 100%.

A number of ways of concerns have been raised about opening up the retail sector for FDI in
india. Retail trade employed 7.2% of the total workforce which translates to 33.1 million jobs
(DIPP report,2010). Following agriculture 2007-08,the retail sector is the second largest
employer in (NSS,64th round).

Proof from the united states suggest FDI in organized retail could help tackle inflation with
wholesale prices.
In urban areas, real estate rents are also very high. Thus the opportunities in this sector are
limited for those retailers with deep pockets, and puts pressure on their margins.