Fdi aditi
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Transcript of Fdi aditi
ADITI SINGH
FDI IN
RETAIL
SECTOR
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ADITI SINGH
FDI IN RETAIL
POLICY
PERSPECTIVE
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ADITI SINGH
An investment is..
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The commitment
of money or capital to
purchase financial
instruments or assets in
order to gain profitable
returns.
ADITI SINGH
An investment becomes foreign investment when..
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Investment done by citizens and government of one country (home country) invest in industries of another country (host country).
Foreign
Investment
through
Foreign Direct Investments
Foreign Instituti
onal Investor
s
ADITI SINGH
FDI Routes
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Automatic Route Government
No permission required
Approval /License required.
ADITI SINGH
FDI Policy Initiatives
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• 1991- FDI allowed selectively up to
51% in priority sectors.
• 1997-FDI allowed up to 100% in
sectors like mining, manufacturing.
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• 2000-06 FDI allowed up to 100% in
specified sectors.
FDI limits increased.
Procedures further simplified
• The top 3 Indian Regions attracting the
highest FDI.
Mumbai, Delhi and Karnataka.
Account for nearly 62% of the
total FDI.
ADITI SINGH
Modes of FDI
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By Targe
t
•Mergers and Acquisitions•Horizontal FDI•Vertical FDI. *Backward Vertical FDI *Forward Vertical FDI
By Motiv
e
•Resource-Seeking•Market-Seeking•Efficiency-Seeking•Strategic-Asset-Seeking
ADITI SINGH
Introduction to Modern Retail
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Barter system
Weekly marketVillage melas
Kirana StoresConvenience store
Government Stores
Super marketsHyper marketsMallsBrand outlets
ADITI SINGH
FDI Policy in Indian Retail Sector
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Single Brand
Retailing
• 51%
Cash and
Carry Model
• 100%
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Why Global Retailers Look Up to India?
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Incentives attract FDI.
Market size and potential are sufficient
inducers.
Tax breaks, import duty exemptions,
land and power subsidies, and other
enticements.
ADITI SINGH
Comparison of FDI Inflow.
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FDI inflows from August 1991 to
April2010 were $134.6 billion.
FDI inflows from 2000-10 crossed
$300 billion
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RETAIL INDUSTRY :
AN OVERVIEW
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Indian Retail SectorGRDI Position : 3rd
Size : $ 400 billion
Growth Rate : 13%
GDP contribution : 12%
Major sector : Food and
Grocery
Employment : 2nd largest
industry (35.06
million)
Types: Organized ( 5%)
Unorganized ( 95%)
ADITI SINGH
Emerging Trends
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• Corporates are increasingly coming
into this sector.
• Demand of branded goods on a large
scale.
• Demand of new and varied products.
• High quality product is preferred .
• Varied window display.
• E-tailers increase the presence.
ADITI SINGH
Segmentation
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Retail Segment
Percentage holding in sector
Major retailers
Food and grocery 63% Reliance fresh, Café brio, food bazaar
Clothing, textile and fashion
9% Westside, shoppers stop, globus
jewellery 5% Tanishq
Catering services 5% IRCTC
Consumer durable 4% Viveks, vijay sales, Croma
pharmaceuticals 4% Piramal group
Entertainment 3% Bowling co.,
Furnishing, utensils 3% Hometown, Tangent Concept
Mobile handsets 2% The mobile store,
ADITI SINGH
FDI POLICY IN
RETAIL
OPPORTUNITIES
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ADITI SINGH
•Increase in consumer
class.
Consumer class
will grow from 50
million at present
to 583 million by
2025.
With more than 23
million people
taking their place
among the world’s
wealthiest citizens.
Consumer Class Shift
Upper
class
Middle clas
s
Lower
class
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ADITI SINGH
•Employment generation.
Second-largest employer
after agriculture.
Retail trade employing
35.06 million.
Wholesale trade generating
an additional employment of
5.48 million.
Employment Generation
Additional 1.6
mn jobs .
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ADITI SINGH
•Technology Better use of
resources and goods.
Wastage and Storage
problems will be resolved.
Efficient logistics,
production, and distribution
channels.
Digital records.
Technology
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ADITI SINGH
Infrastructure
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ADITI SINGH
•Rural market.
Robust Consumption.
70% Indian households.
2/5 of the country’s total
consumption pie.
Accounts to 45% of GDP.
Rural Market
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ADITI SINGH
Fiscal Growth
Evergreen Need
•FDI in Retail sector will resolve problems regarding foreign exchange in India.
•The life-long basic needs will keep on driving the Retail Industry.
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