Fdi Boon or Bane

5112 WordsMar 23, 201321 Pages
FDI FDI in Retail –BOON OR BANE??? *MD13109* Abstract: India is the attractive and profit oriented market for the investment to developed countries. Despite its good surplus and evergreen sector, the Retail-business in India lacks in Capital Investment and lack of transparency. The retailers are just focusing on urban sector and are unable to penetrate in rural sector. FDI can be one solution that will lead to the expected development. If FDI is allowed in Retail-sector, it will help Retailers to gain more profits thus eliminating the flaws in the current system. As per government norms, if FDI is allowed then 50% of the total FDI has to be invested in backend infrastructure. This will improve the processing, distribution, packing &…show more content…
In the past decades, FDI was concerned only with highly industrialized countries. US were the world’s largest recipient of FDI during 2006 with an investment of 184 million from OECD (Organization for Economic Co-operation and Development) countries. France, Greece, Iceland, Poland, Slovak Republic, Switzerland and Turkey also have a positive record in FDI investments. Now, during the course of time, FDI has become a vital part in every country more particularly with the developing countries. This is because of the following reasons: * Availability of cheap labor. * Uninterrupted availability of raw material. * Less production cost compared with other developed countries. * Quick and easy market penetration. FDI in the Retail sector: Retailing is one of the world’s largest private industries. Liberalizations in FDI have caused a massive restructuring in retail industry. The benefit of FDI in retail industry superimposes its cost factors. Opening the retail industry to FDI will bring forth benefits in terms of advance employment, organized retail stores, availability of quality products at a better and cheaper price. It enables a countries product or service to enter into the global market. Cheaper production facilities: FDI will ensure better operations in production cycle and distribution. Due to economies of operation, production facilities will be available at a cheaper rate thereby resulting in availability of variety products to

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