FDI IN RETAIL SECTOR: CONSEQUENCES OVERLOOKED

ABSTRACT

Foreign Direct Investment (FDI) is an important source of private capital for developing countries. Foreign capital mobilization plays a very significant role in resource mobilization, needed for achieving higher growth and earning potential. It’s been felt that FDI in the retail sector can expand markets by reducing transaction and transformation costs of business through adoption of advanced supply chain and benefit consumers, and suppliers (farmers). This also can result in net gains in employment at the aggregate level. But an issue of current interest is whether FDI can contribute to the objective of reducing poverty? Also the issue is being highly debated by opposition party stating that –“India will become a country of sales girls and boys where shops run by American and British companies will sell mostly Chinese goods”. Considering all the facts this paper bring forth a few conceptual issues that may be overlooked.

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