FDI in Multi-Brand Retail Sector in India : Challenges and Opportunities

On 14th September 2012, India's Cabinet headed by prime minister Man Mohan Singh decided to allow the FDI in multi brand retail up to 51%. This decision will have a great impact on the face of retail trade in India. The important question is whether this will bring cheers to the lives of consumers in India or otherwise. The other important question is how will it affect the 4.2 crore domestic retailers in India.Post globalization, the retail sector in India is hailed as one of the sunrise sectors in the economy. Retail sector is the largest private industry in India. It employs around 4.2 crore people which is 9% of the total work force in India. It contributes to 10% of its GDP. The retail sector is growing at a very faster phase as the total Private Consumption Expenditure of Indians during post liberalization is growing very fast. Since 2005 every year it is growing at 14% per annum and present it is worth $450 billion. AT Kearney, the well-known international management consultancy rightly pointed out that globally, India is the 'second most attractive retail destination among thirty emergent markets. The Price water house coopers have ranked India among the six most attractive destinations for investments in retailing alongside China, Turkey, Thailand, Malaysia and Hungary. Hence the world retail giants are eyeing their share in Indian retail market