Retail FDI in India
Tapping growing consumer opportunities
The Government of India has been proactively amending the Foreign Direct Investment (FDI) regulations from time to time to support in creating a conducive investment environment in the country. This report showcases opportunities in the India retail sector in the backdrop of the applicable regulations.
The report underlines the need for FDI policy, which is important to highlight the trends of convergence of modern retail and traditional retail that can allow deeper in-roads in non-urban areas; a key proposition that multinational enterprises can take advantage with FDI. In turn, global brands fetch capital investment, technology strength, and infrastructure benefits for the local markets; thus, bringing in new sustainable retail models for an emerging economy such as India.
Executive Summary
India with its most dynamic consumption environment globally, has continually attracted global investors and multinational companies to venture in making investment in India. India thrives to ride the wave of development and establish itself as an advantageous ally for collaborations; the recent announcements made by the Union Cabinet of India exude the same message.
Key findings from the report
Driven by the increased disposable income, rising proportion of discretionary spends, growing internet penetration and rising number of online shoppers, the total retail & e-commerce sales are expected to increase at a CAGR of 10.8 per cent and 30 per cent respectively between 2017-18 and 2021-22
As per World Bank’s Doing Business Report 2020, India moved from 130th (DBR 2017) to 63rd position
Detailed illustration of key considerations for FDI:
- Entry route,
- Models of Retail business,
- Sector caps and FDI linked performance conditions
- Funding instruments
- Valuation
- Forms of business
Fast-tracked FDI clearance process post abolishment of Foreign Investment Promotion Board in 2017, directly transferring FDI proposals to concerned ministries for review & clearance
Deconstructing the tax and regulatory landscape to elucidate underlying business opportunities through FDI route