FDI in Retail in India is a Boon or Bane?

Dec 15 • Group Discussion • 30197 Views • 149 Comments on FDI in Retail in India is a Boon or Bane?

FDI in retail industry means that foreign companies in certain categories can sell products through their own retail shop in the country. At present, foreign direct investment (FDI) in pure retailing is not permitted under Indian law. Government of India has allowed FDI in retail of specific brand of products. As India is one of the developing countries, so FDI must be promoted but must be kept under control as it can affect the economy of the country.

FDI in retails

FDI in INDIA

FDI in my opinion is bad for the country’s economy. As we are in the category of developing country and to develop properly we need to control the country’s economy very carefully. If the % in FDI in retail sector (multi-brand) is increased then the investment in India’s retail market will be from foreign investors and the profits are also drained to the investors. And moreover in INDIA, the retail sector mainly depends upon the agricultural sectors and the producer and if FDI is increased then it is going to affect the agricultural sector of the Country very badly and which will affect the country’s economy. And if the % of FDI is increased to 100% in retail (both single and multi-brand) sector then government will lose the control over this sector completely and then it cannot help in controlling this sector with its rule and regulations as the whole retail sector would be privatized. And this privatization can make a very serious effect on the country’s economy.

FDI Foreign Direct investment

Top Foreign Investors

And one of the most disadvantage of FDI in retail sector is that as we know that the retail sector is one of the major employment provider and permitting FDI in this sector can displace the unorganized sector and leading to loss of livelihood the most favoring example is if wall mart entry in retail sector is allowed then it will kill the millions of local shops and jobs. The global retailers would exercise monopolistic power to raise prices and monopolistic power to reduce the prices received by the supplier. Hence both the consumer and supplier would lose while the profit margin in such retail change would go up. So from the above points i can say that  FDI in retail sector is not good for India.

Advantages of FDI in Retail in India

  • Growth in Economy
  • Job Opportunities
  • Benefits to Farmers
  • Benefits to consumers
  • Lack of Infrastructure
  • Cheaper Production facilities
  • Availability of new technology
  • Long term cash liquidity
  • Conducive for the country’s economic growth
  • FDI opens up a new avenue for Franchising

Disadvantages of FDI in Retail in India

  • Impact on Local Markets ( Kirana Shops)
  • Limited Employment Generation
  • Fear of Lowering Prices
  • Negative Impact on Indian Economy
  • Negative Impact on Indian Domestic Market

Please give your views in the comment section below. Any type of suggestion will be appreciated.

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149 Responses to FDI in Retail in India is a Boon or Bane?

  1. Chiray Baheti says:

    FDI in retail is a boon in Indian Economy. FDI offers great oppertunity to the people of India and increses the Indian economy. By FDI money which we get from foreign market is used to increase the global market. Prices of foreign trades are lesser as compared to present time. The quality things become cheaper in future if FDI retail in marlket comes. Wallmart which is an joint venture with Bharti increases the market. So it is a boon for Indian Market

  2. Sandeep Verma says:

    yes FDI must be controlled in retail sector we have 49% FDI allowed but now government is seeking for 100% FDI in retail sector ? and now if it is approved by government then the situation of our economy will be very bad.As govt. couldn’t control the price rise then afterr allowing 100% FDI how will it control the sector as 100% rule will be of the investor and there would be no play field for Government.

  3. huma fatima says:

    It can be fruitful if controlled else not..and we have to make sure that we are trusting the right company to flourish in the country..and the brand like “Amul” which has been working so far should be allowed to sustain before other brands are encouraged to build their stocks in the country…..

    • Sandeep Verma says:

      miss fatima , yes FDI must be controlled in retail sector we have 49% FDI allowed but now government is seeking for 100% FDI in retail sector ? and now if it is approved by government then the situation of our economy will be very bad.As govt. couldn’t control the price rise then afterr allowing 100% FDI how will it control the sector as 100% rule will be of the investor and there would be no play field for Government.

  4. ramesh verma says:

    fdi in retail is good for india,, it will create jobs not only for educated ones but also for those farmers who are committing suicides for not having right gain form their had earned crops

    • rohil jain says:

      Fdi is not gud bcoz anything which crosses its limiting its bad
      soat particular percentage fdi is gud but it crosses some percentage its not gud for india future

  5. Ankita Sharma says:

    yes, its not good.

    • ramesh verma says:

      fdi in retail is good for india,, it will create jobs not only for educated ones but also for those farmers who are committing suicides for not having right gain form their had earned crops

      • Sandeep Verma says:

        mr. ramesh if it will create jobs for the educated one then where will the uneducated people will go as we all know that in INDIA the literacy rate shows that we have quite a number of illiterate and those illiterate people work out somewhere to earn their livelihood, if FDI is allowed then where will these people will go as it will create jobs for educated one.

    • I thinks it good: because
      > Jobs will be increased in india
      >Prize of not only their but also of indian company will decrease.
      > poor person will be able to purchase low prize things
      > Tax will be submitted by them so it’s also good for government economic way.

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