Indian retail market to open more doors for overseas Indians

Indian retail market to open more doors for overseas Indians 

By the government in the recent wave of foreign direct investment in various fields (FDI), in order to inspire enthusiasm for reform has brought new investment options in India. One of the most controversial reform policy is to allow 51 percent FDI in multi-brand retail. 

Indian retail market 

The retail industry in India in 2010 and 2012 between, experienced a 10.6 percent growth in 2015 is expected to increase to 750-850 billion dollars. Food and grocery retail industry 60% market share, followed by clothing and phone segment the largest category. 

In the organized retail, clothing is the largest segment of the market. "Food and Grocery" and "mobile and telecommunications" Other major contributors to this division. 

In the multi-brand retail FDI policy evolution 

The Government of India has been considering opening up multi-brand retail sector to foreign direct investment over time. In 2010 they published a discussion paper on the topic, and the extensive collection of the public, academia, and industry's views on this issue. In November 2011, the government launched its new foreign direct investment policy recommendations. However, in this political consensus can not be reached on the issue, they had to shelve plans to introduce a policy. Finally, the government decided to adopt a new multi-brand retail FDI policy in September 2012, in order to increase investment options in India. 

Some policy changes in conditions indicate that the government intends to attract more overseas Indians in the Indian retail sector investment and foreign retailers to provide a window to cultivate / grow the SME segment. 

Policy Implications 

FDI policy conditions, the retail industry in India the various market segments have different effects. Policy conditions, it may have a low impact on one segment, but the other segments could be a major stumbling block. Quality foreign direct investment policy of each grocery conditions, such as beauty and health and consumer electronic products, clothing and specialty shops are: 

A minimum of 100 million U.S. dollars of foreign direct investment: a minimum of 100 million U.S. dollars of foreign direct investment and 51% equity interest in a foreign entity biggest constraint implies the minimum investment requirements, while foreign and Indian partners for more than 100 billion rupee.

Back-end infrastructure, 50% of foreign direct investment within three years: in the backend infrastructure investment 22 billion rupees 25 billion rupees minimum investment is investment in Indian retail sector during the three years. However, the different retail formats dynamic back-end infrastructure requirements 

30% of purchases from the "small" industry: policy constraints mean that retailers should have at least 30% of its sales from its own brand or unbranded products from small industries 

Policy conditions 50% and 30% invested in the back-end, purchasing from small and medium enterprises are the two most difficult foreign direct investment in multi-brand specialty retail and other consumer electronics products, beauty care and other conditions that must be met