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Fdi in Retail India: Impact on Farmers, Consumers and Industry

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Submitted By nileshkate
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FDI in Retail India: Impact on Farmers, Consumers and Industry
Nilesh Kate, Research Scholar
Sinhgad Institute of Management and
Computer Application, Pune nileshkate503@gmail.com 9096714133
******************************************************************************
Abstract:
The retail sector in India is expanding and modernizing rapidly in line with India's economic growth. It acts as a major catalyst in the development of a country through up-gradation of technology, managerial skills and capabilities in various sectors. Rise in purchasing power, growing consumerism and brand proliferation has led to retail modernization in India. The growing Indian market has attracted a number of foreign retailers and domestic corporate to invest in this sector. FDI in the retail can expand markets by reducing transaction and transformation costs of business through adoption of advanced supply chain and benefit consumers and suppliers (farmers). The overall retail market (organized and unorganized) is expected to grow at a compounded rate of 15% over the next 5 years from INR 23 trillion in 2011-12 to INR 47 trillion in 2016-17. Rising incomes will be the primary driver of this growth. Favorable demographics, increasing urbanization and nuclearisation of families are other factors which will drive retail consumption in India. Organized retail, which constituted a low 7% of total retail in 2011-12, is estimated to grow at a CAGR of 24% and attain a 10.2% share of total retail by 2016-17. In short, both unorganized and organized retail are bound not only to coexist but also achieve rapid and sustained growth in the coming years. Government of India’s approval for 51% foreign direct investment (FDI) in multi-brand retail will strengthen back-end infrastructure benefitting farmers and consumers, the amendments in the policy framework for 100% FDI in single brand retail

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