A presentation on Foreign Direct Investments

1. A PRESENTATION
ON

2.  Retail – Interface between producer and
individual consumer for personal consumption.
 Retailer – One who stocks the producer’s goods
and is involved in the act of selling it to the
individual consumer, at a margin of profit.

3.  Organized - Trading activities undertaken by
licensed retailers, that is, those who are registered
for sales tax, income tax, etc. Eg: Corporate backed
hypermarkets.
 Unorganized - Traditional formats of low-cost
retailing, for example, the local kirana shops,
owner manned general stores, paan/beedi shops,
convenience stores, hand cart and pavement
vendors, etc.

5.  It is the backbone of Indian economy.
 A.T. Kearney - well-known international
management consultant - India as the ‘second
most attractive retail destination’ globally from
among thirty emergent markets.

6.  Foreign Direct Investment (FDI) in its classic form
is defined as a company from one country making a
physical investment into building a factory in
another country.
 FDI stands for Foreign Direct Investment, a
component of a country's national financial
accounts. Foreign direct investment is investment of
foreign assets into domestic structures, equipment,
and organizations

8.  FDI In Multi Brand Retail Trade May
Be Permitted Up To 51%, With Government
Approval
 Minimum Amount To Be Brought In, As FDI,
By The Foreign Investor, Would Be US $ 100
Million
 Government will have the first right to
procurement of agricultural products

9.  Retail sales locations may be set up only in cities
with a population of more than 10 lacs as per 2011
Census only 53 cities qualify for FDI in multi-brand
retail out of nearly 8000 towns and cities
 Government will have the first right to procurement
of agricultural products
 Fresh agricultural produce, including
fruits, vegetables, flowers, grains, fishery and meat
products, may be unbranded.

10. Single
Brand •51%
Retailing
Cash and
Carry •100%
Model

11.  Gain a foothold in a new geographic market.
 Increase a firm’s global competitiveness and
positioning.
 Fill gaps in a company’s product lines in a global
industry.
 Reduce costs in areas such as
R&D, production, and distribution.

12.  Long-term Market Potential
 Low cost But Qualified, Educated/Skilled Labor
Pool.
 Access to Natural Resources.
 Geography
 Stability of the economic and Political
Environment.

13.  Price Reduction.
 Greater Efficiency and improved living
standards.
 Greater output and domestic consumption.
 Increase in Domestic Employment/Drop in
unemployment
 Improved Selection

14.  Domestic firms may suffer if they are
uncompetitive.
 If there is a lot of FDI in to one industry, the
country may become too much dependent on that
industry which might be risky for the country
 Inflation may increase slightly.

16.  Consumers – Access to some of the major global
brands.
 Improved quality and variety of products.
 Increase competition and expand manufacturing.

22. SKILLED
WORKERS
REAL STATE
PROBLEM COMPETITION
MARKET INFLATIO
POWER N
SUPPLY TAXATION
CHAIN POLICIES
MANAGEME
NT
PROBLEM IN
RAISING
FUNDS

23. "Permitting FDI (foreign direct investment) in retail in a
phased manner beginning with metros and incentivizing
the existing retail shops to modernize could help address
the concerns of farmers and consumers.
FDI in retail may also help bring in technical know-how to
set up efficient supply chains which could act as models of
development."

25. ANY QUERY