International Journal in Management & Social Science
Year : 2016, Volume : 4, Issue : 6
First page : ( 125) Last page : ( 135)
Online ISSN : 2321-1784.

Foreign direct investment in retail sector

Dr. Nayak Yajnya Dutta

Lecturer in Commerce Khallikote Autonomous College, Berhampur-1, Odisha

Online published on 8 August, 2018.

Abstract

India entered into the World Trade Organization's General Agreement on Trade in Services (GATS), in January 1995 pursuant to the Uruguay Round negotiations. Each WTO Member is required to have a schedule of specific commitments. It is a document which identifies the service sectors, sub-sectors or activities which are subject to market access and national treatment obligations and any limitations attached to them. One of the standard services to the GATS includes distribution services (i.e. commission agent wholesale trade services, retailing services and franchising), As per India's Revised Offer at WTO on August 24, 2005, India has offered to undertake extensive commitments in a number of new sectors/sub-sectors such as distribution services in the areas of commission agents and wholesale trade services. As a backdrop, India is gradually opening up the retail trade sector to foreign investment. Traditionally, the retail sector in India was considered to be a sensitive sector especially due to factors, such as (i) the employment it generates and (ii) being in its early and undeveloped stage (particularly the domestic organized retail segment) it is not in a position to compete with large players. As a result, the Government policy has largely been to protect agriculturist and small retailers and therefore has discouraged entry of larger retailers in the market. Thus, participation of foreign investors in the retail sector was prohibited.

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