Foreign direct investment in Indian retail sector an updates of issues, challenges and opportunities in FDI

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 organised retailing in India has been much slower as compared to rest of the world. Undoubtedly, this dismal situation of the retail sector, despite the ongoing wave of incessant liberalization and globalization, stems from the absence of an FDI encouraging policy in the Indian retail sector. In this context, in this dynamic environment of today when winds of change are sweeping across the globe the international community is ready to integrate itself with the Indian economy. The govt. encouraged by the outcome of economic policy of 1991 in India, has proposed retail reforms mainly as 100% FDI in the retail sector in India. It may benefit by bringing in investment into development of complete backend infra structure like cold chain & supply chain enhancing efficiency of food chain, as well as eliminating the exploitative system of middlemen which bleeds the farmers and squeezes the consumers.