FDI in Retail Sector in India: Opportunities and Challenges in the Present Scenario

Abstract

Organized retailing is currently in a nascent stage in India. Although Organized retailing, contributes only 4% of total retail at present, will grow by 25–30% every year and become Rs.100,000 crore sector (Rs.1000 billion) by 2010, the organized retailing sector evaluation passes through the four important phases. In India, a number of barriers are found in the way of the development of organized retail market. FDI restrictions on the entry of international retailers in the country, different sales tax rates exists in different states of the country, implementation of VAT, complex cities in the tax structure, problem of funding from the banks, lack of proper infrastructure are constraints on the way of organized retailing. The three biggest challenges of the organized retail industry will be managing manpower, real estate and supply chain. This paper discusses, how Retail sector growth will help various sections of the society and country as whole and what kind of measures government should take for the growth of organized retailing in India?