FDI in retail sector India: structural reform more than a political reform

Abstract

In our brief study, we try to address one of these market inefficiencies, by studying the Indian retail sector, which has posed as a structural defect causing a political battle rather than an economic one. We take a historical outlook to the contribution of retail and wholesale sector in our economy with respect to other sectors, before and after FDI was introduced. To prove this defect, we concentrate on two aspects of the retail sector. We discuss the present procurement and distribution system in the basic agricultural commodities which is majorly handled by the government agencies. We also brush along the outdated legislation which regulates the whole market and is the underlying cause of un-competitiveness in the sector. We analyse the views of skeptics and try to reason out some biases within their work. We conclude with recommendations that free market is better than a nationalised one.