FDI in Indian Retail Sector-Contemporary Scenario

Despite a difficult year, India continues to remain an attractive investment destination and strategic investors continue to have confidence in India’s strong fundamentals. The fact that India is a preferred destination for Foreign Direct Investment (FDI) has also been acknowledged by international analysts who rank India highly in terms of attractiveness for FDI. The FDI inflows between April 2011 to March 2012 stood at USD 46.55 billion, showing a jump of 34 percent than the previous year. After that, till September 2012, USD 18.70 billion of total FDI inflow has taken place. In the year 2012, Government of India made significant changes in the FDI Policy regime, which liberalizing policy for 100% FDI in single brand retail trading, permitting foreign airlines to invest up to 49% in the capital of Indian companies operating scheduled and non-scheduled air-transport services, and up to 49% in power exchanges under the government approval route. The foreign investment limit in companies engaged in providing broadcasting carriage services has also increased. FDI can supplement and complement the Indian industry and make it globally competitive, open up export markets and provide access to international quality goods and services. It can raise resources through technological up gradation, optimal utilization of human and natural resources, and backward and forward linkages. There are promising fields like the food processing sector in the country. Foreign retail giants are willing to buy processed food from the country. Foreign direct investment (FDI) in retail space, specialized goods retailing like sports goods, electronics and stationery is also being contemplated.