Opportunities and Threats to Domestic Retailers due to the Entry of Foreign Retailers in India

Out of 30 most attractive global destinations India has been the second most attractive emerging market for retail investors. Retailing is the largest private industry in India and is the largest source of employment after agriculture, generating 14 to 15 percent of its GDP. Indian retail industry is one of the fastest growing industry. This sector has maximum potentials yet to be explored by domestic as well as international organized retailers because, still 97-98% of total retail industry lies with unorganized sector in India. But in India, there is significant protest from trading associations and other stakeholders against allowing FDI in retailing, yet foreign retailers entering in retailing in India through various routes to explore potentials of Indian retailing sector. And it is expected to grow from US$330 billion in 2007 to US$640 billion by 2015. The paper aims at studying FDI norms in Indian retailing, current FDI scenario, and more specifically challenges and threats available to domestic retailers from the entry of foreign retailers.