The evolution of foreign direct investment in multi brand retail: challenges faced by the Indian retail sector

Foreign direct investment in multi brand retail in India got the approval of the Loksabha, (Parliament of India) on December 5, 2012 and in the Rajyasabha (upper house of the Indian Parliament) on December 7,2012,with the opposition motion seeking against FDI immediate withdrawal of the decision getting rejected. In any industry new entrants bring in new capacity, the desire to gain market share and substantial resources. Barriers to entry deter new competitors from entering the market and creating more competition for established firms. The key barrier to entry is the one faced by global retailers is FDI in Indian retail market. A recent study by CII & BCG (Confederation of Indian Industry and Boston Consulting Group) estimated the size of organized retail was 28 billion US dollars in 2010 to be of 6% to 7% of the total retail market in India. The study predicted that the size of total retail sector would grow to 1.25trillion US dollars by 2020 (knowledge @ Wharton) This research paper aims to present the challenges faced by the stake holders in the Indian retail sector to FDI in multi brand retail.