INTRODUCTION to Case Study

Foreign direct investment (FDI) in the retail sector in India was limited. On September 14, 2012, government eased retail policy for the second time by allowing Foreign Direct Investment (FDI) in the Multi-brand Retail Sector (MBRT) up to 51% with some conditions and up to 100% FDI in single brand retail trading with Government approval. Earlier in 2006, the government eased retail policy for the first time, allowing up to 51 per cent FDI through the single brand retail route.

While it is not easy to be successful in a place where culture, tradition and food habits change every 124 miles still foreign retailers will bring technology, efficiency in supply chain management and global experiences from previous ventures. They will effectively harness their expertise with cold storage technologies to lure customers with fresh and exotic vegetables, fruits and organic produce. Organized retail sector is already facing the competition from unorganized sector, also with allowing investment by foreign retailers in multi-brand retailing may lead to unfair competition and ultimately result in large-scale exit of incumbent domestic retailers. It has been observed that the organized retail sector in India is an infant industry. It is too young to compete with foreign retailers like Wal-Mart on the level of warehousing technology and efficiency in supply chain management