Exploring and Understanding All about FDI in Retail Sector

The word “Retail” originated from the French term “Retailer,” which means the sale of goods and services in small quantities to the final customers directly. FDI in the retail sector simply means that foreign organizations in certain categories can put their goods and services up for sale through their own retail shop in the country.

Before 2006, FDI was not allowed in the retail sector due to the fear of losing jobs and entrepreneurial opportunities amongst the people. However, the government of India later allowed FDI in the retail sector.

Currently, FDI in single-brand retailing is allowed up to 100%. On the other hand, in multi-brand retailing, it is allowed up to 51% only.

Presently, the retail sector of India is considered to be one of the most important upcoming sectors. Hence, FDI in the retail sector plays an important role in the economic growth and development of the country.

Therefore, it is safe to say that the step taken by the Indian government allowing FDI in the retail sector is a crucial step for undertaking the growth and development of the economy of India and regarding its integration with the global economy.

Retail Sector of India

Whenever any product is bought by the customers from the retail shops, then he/she is not supposed to sell the same to a third party for considering him/her to be the ultimate customer in the retail sector.

In 2004, the Delhi High Court had mainly dealt with the issue of defining the word “retail,” and subsequently, the same definition of the term was adopted as was connoted to it in the common parlance.

Thus, retailing is regarded as the intermediary between the producer/wholesaler and the final consumer.

If we specifically talk about the retail sector in India, we are all aware that it has accomplished greater heights by becoming one of the fastest-growing sectors globally.

The retailing sector of India has always proven to be an essential part of the service industry. It has grown considerably with faster economic growth, higher disposable income, and rapid urbanization.   

This sector in India accounts for 14-15% of its GDP and acts as a pillar of the Indian economy. 

Over the past few years, the retail sector in India is experiencing a drastic transformation in it from the traditional format to the modern format.

It has not only experienced exponential growth in the developed metropolitan cities but also in smaller towns too.

As per the Global Retail Development Index (GRDI), India has regularly performed well in maintaining the top position regarding the retail index.   

FDI India is Here to Support You

At FDI India, we make the complex structure of foreign investments and transactions under FDI through years of experience in the field. Our aim is to transform the face of the facilitation services of FDI in India by keeping our focus on sustainable investments or loans for helping Indian businesses.

FDI India is transforming the investment climate of the country by making the business environment for investors simple.

Its experts specialize across different states and sectors of India, handholding investors through their investment lifecycle right from pre-investment to after-care.