3_Foreign Direct Investment In Indian Retail Sector

The initiative of Indian Government to allow 100% FDI in single brand retailing and 51% in multi brand retailing has, with a few affirmations, raised many eye brows. Is it recolonization in the post independence era or a class struggle in the words of Karl Marx? This paper attempts at studying the economic effect of ‘FDI in retail’ on various sectors of the economy drawing the cue from the experiences of other nations. Will the domestic manufacturers compete and evolve or get marginalized? Will employment level improve as big retailers come in or worsen because of the disappearance of the ‘kirana’ stores? Will the farmers benefit due to elimination of intermediaries or become a captive supply base to foreign retailers? And the most intriguing question is what is more important for economic development, GDP or GNP?