Impact of FDI in retailing industry

The Indian Retail industry is the fifth largest in the world. Retail industry is one of the fastest growing industries in India, especially over the last few years. It comprise organised and unorganised sectors. India's retail industry is estimated to be worth approximately US $ 411.28 billion and still growing, expected to reach US $ 804.06 billion in 2017. Foreign Direct Investment (FDI) in retailing remains a widely debated and heated issue in India's economic and political environment. The Indian government has opened the retail sector to FDI through a series of steps by the Industrial Policy 1991. The transformation of the retail market is likely to have a long-lasting impact on whole sale trade and the distribution of FMCGs as well. Fast Moving Consumer Goods (FMCG) is also called Consumer Packaged Goods. The FMCG sector is the fourth largest in the Indian economy with a total market size of US $ 44.9 billion in 2016. The sector grew at a Compounded Annual Growth Rate (CAGR) of 16.2% during 2006–13. The decision to allow 51% FDI in multi brand retail and 100% FDI in single brand retail augers well for the outlook of the FMCG sector. The move is expected to bolster employment and supply chains, apart from providing high visibility for FMCG brands in organised retail markets bolstering consumer spending and encouraging more product launches.