FDI in Retail

Government of India has opened up the retail sector of India to the world by allowing FDI in retail. Now the basic question is what does FDI in retail mean, well in simple words FDI in retail refers to opening of retail sector to foreign investors. Now foreign companies will able to set up and invest into retail market of India, and one would be soon seeing international retail giants like Wal-Mart coming to Indian retail market.

FDI in retail will be helpful for domestic retail companies also and the first questions which come to investors was which companies will get benefit out of FDI in retail and that is the reason why some of the retail stocks like Pantaloon, Provogue, Koutons, Vishal Retail saw buying by investors and they rose close to 15 to 25 percent since the news of FDI in retail was made public. It’s still not certain whether these companies will get substantial benefit out of this news; still it is positive news for retail sector as a whole.

There has been lot of opposition in India due to FDI in retail both from political parties and also from small retail shop owners and their point of contention is that in the long run FDI in retail will be detrimental to all whether its farmers, small shop owners or ultimate consumers. Whether government is correct or the people who are opposing it only time will tell because it has both advantages and disadvantages and it is difficult to know at this point whether it’s a good or bad because every country is different and it is not necessary that thing which was successful or unsuccessful in other countries would meet the same fate in this economy.

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