FDI in

Retail
 RETAIL INDUSTRY OVERVIEW 
Retail Industry
 The retail industry is comprised of supermarkets,
departmental stores, chain and franchise stores, online
merchants, door to door sellers etc.
 Market size was USD 790 billion in 2018, expected to Organized Unorganized
be around USD 1 trillion in 2021 and expected to Segment Segment

reach USD 1.75 trillion by 2026.

 The growth rate in the industry is 9-10% CAGR.
 The e-commerce segment has a market penetration of
 12% of the  88% of the
2% currently and is about to reach 12% by 2026 to industry industry
USD 200 billion.  Supermarkets  Regular retail
and chain and shops in the
 The key driving factors are, growing urbanization, franchise stores market.
digitalization, rise in nuclear families, purchasing  Online
merchants etc
power growth etc.
 FDI Routes

 FDI is permitted through two routes.

 Automatic Route: No permission required for investment
 Government Route: Approval from the concerned administrative ministry is required.
FDI allowed in Key Sub Sectors of the Retail Sector in India

 Cash & Carry Wholesale Trading Sector: 100% FDI allowed through automatic route. This is a sector
where the goods are sold from large warehouses.

 Food Product Retail Trading: 100% FDI allowed through Government route. (Examples, are
McDonalds, KFC, Wendy’s, Dominos and other takeaways)

 Multi Brand Retail Trading: 51% FDI allowed through Government route. (Sector where products of
different brand are sold under a single roof. Example, Big Bazar, V-Mart, Reliance, Shoppers Stop
etc.

 Single Brand Product Retail Trading: 100% allowed through automatic route. (Selling multiple
products under a single brand name, for example, Adidas, Nike, IKEA, Pantaloons, Starbucks etc.
However, where the FDI is more than 51%, at least 30% of the value of goods should be sourced
from India. This was in view to promote domestic sectors in India i.e. micro, small and medium
enterprises,
Major Foreign Investors in
Retail Sector

Adidas
Amazon
Walmart
H&M
IKEA
Marks & Spencer
Nike
Puma
Alibaba
 Conclusion

The retail sector in India is changing at a very rapid mode and is growing at a very fast rate.

The digital revolution is a main contributor to a paradigm shift in consumer behavioral patterns resulting in revamping
of strategies formulated by retailers and the complete supply chain. Increasing number of new retailers are turning
digital in nature.

Government policies and regulations are the backbone of growth of the consumer industries. If executed well, these
policies can bring about a developmental shift in the industry with incoming foreign investments and technologies.
References
 Information retrieved from investindia.gov.in a foundation under Department of Promotion of
Industry and Internal Trade, Ministry of Commerce and Industry, GoI (Date 15-03-2021)
Thanks and Regards