Research-Based Learning-II

“IMPACT OF FOREIGN DIRECT INVESTMENT SINGLE AND

MULTI BRAND IN INDIA”

Submitted by UTKARSH MITTAL

BBA Batch – (2022-2025)
Roll number:2202010545
System ID: 2022003694

Department- MANAGEMENT
Sharda School of Business Studies

MR.ARUN KUMAR GUPTA

Faculty Mentor/Guide
NAME OF FACULTY, SUSBS

SHARDA UNIVERSITY, GREATER NOIDA-201306

INDIA

Session: August 2022-25

Table of Contents
Declaration.................................................................................................................................................
Acknowledgment.......................................................................................................................................
Abstract......................................................................................................................................................
Introduction................................................................................................................................................
Review of Literature .................................................................................................................................
Objectives of the Study .............................................................................................................................
References..................................................................................................................................................
...................................................................................................................................................................
 Declaration
This is to attest that I am the author of the Research Based Learning Report titled
"IMPACT OF FOREIGN DIRECT INVESTMENT SINGLE AND MULTI
BRAND IN INDIA" and that I have downloaded……..research papers from
journals that have recently been indexed. The research items that were downloaded
and studied throughout the session served as the basis for the report.

Signature of the candidate

Name of candidate UTKARSH MITTAL

 Acknowledgment
To begin with, I cannot thank enough the Lord for his gift of life and for the
strength he granted me to complete my research report. I also want to express my
gratitude to the School of Business Studies for letting me conduct this study. For
her encouragement and assistance during my research report assignment, I would
like to thank my mentor, (Name of faculty guide). I also wish to express gratitude
to my family, especially to my mother, who has supported and encouraged me. I
want to express my gratitude to all of my friends for their moral, spiritual, and
physical support. I appreciate MR.ARUN GUPTA SIR in assisting me in finishing
and completing that reporting project.
 ABSTRACT

Impact of Foreign Direct Investment (FDI) on Indian Single- and Multi-Brand

Retail

In rising markets such as India, foreign direct investment (FDI) has played a
pivotal role in propelling economic development and structural transformation.
This study investigates the effects of foreign direct investment (FDI) on India's
single-brand and multi-brand retail industries. In these particular retail segments,
the study investigates how FDI inflows have affected supply chain management,
consumer behavior, market dynamics, and overall economic growth.Impact of
Foreign Direct Investment (FDI) on Retail Sales of Single and Multiple Brands in
India

The study uses a combination of quantitative and qualitative techniques, including

surveys and interviews with important retail industry players, as well as regression
analysis utilizing secondary data from government publications and industry
studies.

In addition to providing useful implications for retailers, investors, politicians, and

other stakeholders interested in the growth and sustainability of India's retail sector
in a globalized economy, the study's findings will add to the current policy
discourse on foreign direct investment (FDI) in retail.
 Introduction

When a government, business, or investor from one nation purchases a sizable

ownership stake in a foreign enterprise or project to expand operations into a new
area, this is known as foreign direct investment, or FDI. It is not the same as
investing in stocks; instead, it promotes long-term, solid economic relationships
between economies, which facilitates global economic integration.When a
government, business, or investor from one nation purchases a sizable ownership
stake in a foreign enterprise or project to expand operations into a new area, this is
known as foreign direct investment, or FDI. It is not the same as investing in
stocks; instead, it promotes long-term, solid economic relationships between
economies, which facilitates global economic integration.

A foreign entity purchasing a sizable share in a business or project in another

nation is known as foreign direct investment (FDI). These investments usually
target open economies with highly skilled labor markets and promising growth
prospects. In addition to capital investment, foreign direct investment (FDI) also
covers management, technology, and equipment provision with the goal of
achieving significant control or influence over decision-making. Approximately
$1.28 trillion in foreign direct investment (FDI) was made in 2022, with the United
States being the largest source and destination, followed by other significant
economies including China, Brazil, and Japan.

The ratio of foreign direct investment inflows to GDP can be used to determine
how desirable a country is to long-term investors. In 2022, the U.S. had 1.5% of
GDP from foreign direct investment (FDI), compared to 1.0% in China. Smaller,
more active economies typically have far higher ratios; in the same year, Hong
Kong had 33.6% and the Cayman Islands had 359.2%

In India, foreign direct investment (FDI) in single-brand retail is permitted up to

100% of the time, according to the guidelines provided in Press Note 3. These
prerequisites include limiting the sale of goods bearing several brands,
guaranteeing that the brand is offered globally, and selling only products under a
single brand name. Government clearance is needed for further product categories,
and retail sales of each brand need approval from a different agency. For example,
if Adidas were allowed to retail its main brand, then only Adidas products could be
sold in those stores; selling goods under other Adidas brands, such as Reebok,
would require further approval.

In India, foreign direct investment (FDI) in multi-brand retail generally consists of

selling several brands under one roof, with a maximum foreign equity participation
of 49% at present. A discussion paper published in 2010 suggested capping foreign
direct investment (FDI) in the sector at 51%, requiring a minimum investment of
US$100 million, and requiring reinvestment into backend operations. The Cabinet
has reviewed the idea, but no decision has been made. Regarding the FDI cap,
different government ministries have differing views; recommendations range
from 18% to 51%. Retailers with high space requirements may be able to invest in
cities with a population of at least one million people and within a kilometer radius
of such cities under the proposed concept.
 REVIEW OF LITERATURE

1. Encouraging FDI in India's retail sector has improved its contribution to the
economy, transitioning from an unorganized to a modernized market. Despite
progress since liberalization, more reforms are needed to fully modernize
retailing. Further liberalization may challenge traditional players but should not
impede policy implementation. Structural changes should be facilitated through
human capital development and addressing unemployment. Future research
could employ parametric statistical techniques given data availability
challenges and explore simulation models for deeper analysis. (Utsav
Masharu, Muhammad Ali Nasir, 2018)

2. India has experienced a substantial increase in foreign direct investment (FDI)

inflows, comprising equity, reinvested earnings, and other capital, along with
significant contributions from mergers and acquisitions (M&As) in the services
sector. Since the early 1990s liberalization of FDI policy, India has attracted
over USD 953 billion in foreign investments, driving economic growth,
infrastructure development, and job creation. However, logistics remain a
major barrier, particularly for efficiency-seeking FDI. To facilitate FDI
inflows, India must prioritize completing key infrastructure projects like
designated freight corridors and address issues such as inconsistent regulations
and sub optimal freight movement. A stable policy framework, especially for e-
commerce, is crucial for sustaining long-term investments.(Shweta Singh, Dr.
Deluwar Hoque, 2024)

3. FDI in Multi-Brand Food Retail and Agri Marketing Reforms in India

Paromita Chakraborty1, 2023 This study investigates how India's agri-
marketing system and food retail industry are affected by the multi-brand retail
FDI policy. Policymakers continue to be concerned about possible harm to
small businesses and jobs even as they work to increase efficiency in the retail
industry. Supporters think FDI might help farmers by cutting out
intermediaries, but detractors worry about market distortions. There are
concerns regarding the impact and urgency of foreign direct investment (FDI)
when it is implemented hastily in multi-brand retail without extensive
 engagement. Smaller farmers may be at risk from privatization efforts in
agriculture, which have the potential to turn traditional systems into
enterprises. The difficulty is in ensuring that policies, in the face of pressure
from globalization, balance potential capital capture with India's interests.
India's economic trajectory has been greatly shaped by policymaking that is
becoming more and more responsive to external factors. (Paromita
Chakraborty1, 2023 )

4. T. Vinay Kumar & A. Venkata Ramana 2023,FDI INFLOWS INTO INDIA

AND THEIR IMPACT ON SELECT ECONOMIC VARIABLES USING
MULTIPLE REGRESSION MODEL The statistical analysis's conclusions
highlight a number of patterns and connections among India's economic
indicators across the research period. With a notable range and mean value,
FDI inflows increased generally, with a few notable exceptions. The GDP
increased steadily, with the exception of a few years. Trade liberalization did
not always lead to increased investment or economic growth. Export values
increased on a yearly average. An increase in per capita income suggests higher
living standards. The Wholesale Price Index (WPI) rose, a sign of inflation and
growing product costs. The currency rate of the rupee generally declined,
indicating worries about the economy. Notably, the employment rate fell every
year in spite of an increase in FDI. Despite having little influence on response
variables, the statistical model was able to explain 97% of the variation in FDI,
indicating an excellent fit.
 Objectives of the study
1. Give a summary of India's past FDI trends, including inflows and outflows.

2. Examine how FDI has affected India's productivity, competitiveness, and GDP
growth.

3. . List the dangers and difficulties that foreign direct investment (FDI) faces in
India, including legal obstacles, unstable political environments, and
macroeconomic weaknesses .

4.Present India as a significant participant in the global FDI scene and emphasize
why it is appealing to foreign investors.
 References
1. Utsav Masharu, Muhammad Ali Nasir, 2018 Policy of foreign direct
investment liberalisation in India: implications for retail sector International
Review of Economics (2018) 65:465–487 https://doi.org/10.1007/s12232-018-
0306-y

2. Shweta Singh, et al. (2024),An Analysis Of Trend, Pattern And Strength Of

Foreign Direct Investment (Fdi) And Foreign Institutional Investment (Fii) To
India.Educational Administration: Theory And Practice, 30(2), 3588-3594,
Doi:10.53555/kuey.v30i4.2083

3. FDI in Multi-Brand Food Retail and Agri Marketing Reforms in India

Paromita Chakraborty1, 2023 Vol. XVI, 2023RABINDRA BHARATI
JOURNAL OF POLITICAL SCIENCE (An Annual Double-blind Peer-
reviewed Journal) ISSN 2393-8218 Vol – XVI, 2023 Department of Political
Science Rabindra Bharati University https://rbu.ac.in/home/page/104

4. T. Vinay Kumar & A. Venkata Ramana 2023,FDI INFLOWS INTO INDIA

AND THEIR IMPACT ON SELECT ECONOMIC VARIABLES USING
MULTIPLE REGRESSION MODEL(2023)Scholarly Research Journal for
Humanity Science & English Language, Online ISSN 2348-3083, SJ IMPACT
FACTOR 2021: 7.278, http://www.srjis.com/issues_data?issueId=211 PEER
REVIEWED & REFEREED JOURNAL, APRIL-MAY 2023, VOL-11/57
https://doi.org/10.5281/zenodo.8026766