Emerging trends of foreign direct investment in Indian Retail Sector Ms. Patel Usha Astt. Prof., Faculty of Management, R.D. Foundation Group of Institutions, Modinagar, Ghaziabad (U.P.) Online published on 29 November, 2014. Abstract FDI stands for Foreign Direct Investment, a component of a country's national financial accounts. Foreign direct investment is the investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. Foreign direct investment is of growing importance to global economic growth. This is especially for developing and promising market countries. FDI from investors in developed areas like the EU and the U.S. provide funding and expertise to help smaller companies in these emerging markets to expand and increase international sales. Retailing is one of the world's largest private industries. Liberalizations in FDI have caused a massive restructuring in retail industry. The benefit of FDI in retail industry superimposes its cost factors. Opening the retail industry to FD I will bring forth benefits in terms of advance employment, organized retail stores, availability of quality products at a better and cheaper price. It enables a countries product or service to enter into the global market. Indian retail industry is one of the sunrise sectors with huge growth potential. According to the Investment Commission of India, the retail sector is expected to grow almost three times its current levels to $660 billion by 2015. However, in spite of the recent developments in retailing and its immense contribution to the economy, retailing continues to be the least evolved industries and the growth of organized retailing in India has been much slower as compared to rest of the world. India is rapid gaining importance world-wide as the country has become an investment hub over the last decade. Global investors have retained their faith in the flexible Indian economy even during the toughest of the times. As a result, India enjoyed high foreign inflows and investments when rest of the world was struggling to even survive. According to the latest data released by the Department of Industrial Policy and Promotion (DIPP), India received foreign direct investment (FDI) worth US$ 1.33 billion in May 2012 while cumulative inflows for April-May 2012–13 stood at US$ 3.18 billion. Starting from a baseline of less than $1 billion in 1990, a recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010–2013. As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. According to Ernst and Young, foreign direct investment in India in 2011 was $44.8 billion, and in 2012 experienced an increase of 13% to $50.8 billion. India has seen an eightfold increase in its FDI in March 2013. Top Keywords Foreign Direct Investment, Transnational, Trends, Challenge, Retail. Top |