FDIs for Indian retail trade
Imagine a busy market of 750-1500sq. ft stores, the best fashion brands, adding to the top quality infrastructure chain of fast food restaurants and cafes. Think about Times Square in the US?
… Welcome to India in 2025!
Thanks to the Government of India for removing the cap from Single Brand Retailing through 100% FDI. This is one of the most important steps towards increasing foreign retail investment. The image changes, as global giants such as Carrefour, Tesco and Wal-Mart are launching the Indian market on the route.
History so far: [1959-19003] 1957: Second economic plan launched for the Pvt. Instigation. Investing
• 1968: Presentation of the Foreign Investor Body
• 1973: FERA introduced the diluted companies of foreign capital to 40%
Through a license agreement: Here, a foreign company has licensed a domestic retailer and the latter has issued a license to a domestic retailer promises, India's products. MANGO was the first to enter the Indian market on this road, an agreement with the pyramid, with Mumbai. The trial between Aravind Mills and US-based Geoffrey Beene is another example of this.
Creating a production base in India: Foreign brands like Nike and Adidas started franchises first, but later established their own manufacturing base in Indian companies.
Wholesale Cash: 100% FDI allows you to open a large distribution system in India and help local manufacturers. Only B2B retailers are obliged to trade. The only problem is to identify the buyer as a retailer or professional user / host / institutional buyer who also acts as a final consumer.
51% FDI in Single-Brand Retail: The idea was clear since the only brand retailing business is primarily luxury goods and is within the reach of the Peak Performance Group, leaving untouched traditional Mom & Pop stores intact!
For producers / retailers:
India's GDP (gross domestic product) and Percapita income is 6%, and fourth is US, China and Japan purchasing power parity. The retail sector with a growth rate of 5% represents 10% of GDP and is an attractive target for foreign investment. Increased consumption, the liberalization of the manufacturing sector and the increased purchasing power of the middle income group have prompted foreign actors to take advantage of the country's immune potential, thus increasing the fresh feeling.
One of the biggest problems in Indian retail trade is the supply chain management, which increases the cost of the product. The organized food retail business causes problems with less cold storage and food waste. For the new and experienced market players, we can count on the top-selling sales system. At present, Wal-Mart works with 800 people in Punjab. Wal-Mart Agronoms work with farmers to test soil, reduce time, use digital scales, provide the right weight, and run monthly workshops. The goal is to increase farmers. 20% revenue and export its products worldwide. Thus, it creates a win-win situation for both parties.
The current unemployment rate in India is very high. Approximately 0.4 million job seekers entered the Employment Market, while the number of jobs was less than 5000. If an unemployed person does not get a job for a long time, he opens small capital and infrastructure (especially in rural areas). This forced labor sector was engaged in retail activities, and as a result the economy was not organized, the number of small retailers increased. Manufacturing units / retail outlets created by foreign entrants create more jobs on the market by increasing the specialized labor force, thereby involving unemployed, trained young people.
The restriction of the state government opposed the entry of foreign direct investment, thereby reducing competition in the market. According to a survey, 1000 people in India had 11 outputs. These numbers show ineffective economic growth. As foreign players arrive in the Indian market, there will be a continuous price war where every retailer tries to sell their products cheaper with state-of-the-art infrastructure while maintaining market share. This leads to low inflation and high economic growth, which is the key to poverty reduction.
When recreating multiple branded FDIs, the products bring more direct benefits to the customer at higher quality and lower prices
The main blockade of FDI:  Forms of Indian labor law are old and different , like today's scenario. Restrictions on trade unions, central planning and labor laws are ineffective in the process of globalization.
Corporate tax on domestic companies is 36.59%, while foreigners have to pay 41.82%. Furthermore, sales tax and VAT can be a barrier to falling prices.
Although the majority of Indian political parties are opposed to FDI access to multi-brand retailing concerns to small retailers, it is a fact that non-organized sectors account for 96% of the retail market and it is difficult to shield it. Take an example of China where Wal-Mart has more than 100 stores, but domestic competitors occupy 90% of the market. In Indonesia, this percentage is close to 70%. Countries such as Thailand have become major buying targets after allowing 100% FDI, without limitation, on the number of sales outlets.
The mother and pop stores in India are the strengths of consumer loyalty and fast delivery. However, they offer new solutions for staying in a competitive environment, such as attracting shelf systems, computing, online orders, loyalty programs and air conditioners.
Finally, the retail sector needs huge capital and infrastructure on the market. This is not necessarily a cause for concern for the global giants, but it also has a risk factor for an Indian retailer as it lasts for two years.
The most important question … We are ready to hum and confident enough to say … "Bring it!" …. ????
Source by sbobet th