FDI in Retail Sector in South Asia: A Case of India

Abstract

Foreign Direct Investment (FDI) has become the necessity of every nation as it does accelerate growth in an economy. FDI is double edge weapon as it cuts both ways. It supplements the resources of the host country and also may replace resources in the host country. South Asia is a region wherein FDI has been restricted in the retail sector where as South Asian region is the region of shopkeepers. Hardly 5 per cent of the retailing is in the organized sector and the remaining 95 per cent is unorganized sector. Hence, the biggest issue in South Asia in general and India in particular is whether to allow FDI in the retail sector. Allowing FDI in retail sector would create a plethora of new and modern retailing to the consumers but may generate unemployment to the enormous people in the region. With this back drop, the major objectives of this paper are to highlight the scenario of FDI in retail in South Asia, focusing specifically on India. The paper, as such, is divided into six sections. Section I deals with the introduction. Section II enlists the objectives of the paper to be looked at. Section III deals with the methodology adopted in the study. Section IV highlights FDI scenario in retail sector in South Asian nations. Section V analyses a detailed study of FDI in retail sector in India. Lastly, Section VI includes conclusions that are drawn from the study.