Foreign Direct Investment (FDI) in Retail in India Opens the Doors to a US$160 billion Opportunity.
Prepared by Poornima Vinoo
under the supervision of Professor Dilip Soman, Director of the India Innovation Institute
In December 2012, Indian lawmakers endorsed the government’s decision to allow Foreign Direct Investment (FDI) in Retail in the country. These reforms now allow foreign retailers in India to own 51% of operations in multi-brand outlets and 100% in single-brand outlets. What makes India an enticing retail destination for international retailers is its emerging market status, the fact that it’s the world’s second most populous economy, and its estimated corporatized retail market potential of US$162 billion by 2021.
For the past few years, many international retailers have been patiently monitoring the progress of the reforms, while quietly building their regional expertise – through joint ventures and collaborations with Indian businesses, and experiments in the field. For many other retailers though, India is still uncharted territory, with not many reference points and case studies to guide their investments.
The intent of this white paper is to provide international brick & mortar retailers who are keen on investing in India, with some of the basics. The paper is a blend of data and information that will help unravel the complexity that is the Indian market, and explore the possibilities of venturing into this market.
(Released by the India Innovation Institute, at the Munk School of Global Affairs, and the Rotman School of Management, in the University of Toronto)
