IMPACT OF FDI ON UNORGANISED RETAIL SECTOR OF INDIA project report

A Dissertation Project Report

On

“IMPACT OF FDI ON UNORGANISED RETAIL

SECTOR OF INDIA”

(A case study of Agro Products)

Submitted in partial fulfillment for the award of degree of

Bachelors of Business Administration (BBA)

Batch: 2012-15

Under The Guidance Of Submitted By

Department of Business Management

Faculty of Management & Research

INTEGRAL UNIVERSITY

DASAULI, KURSI ROAD, LUCKNOW.

Faculty of Management And Research

Integral university

Dasauli, Kursi Road Lucknow

CERTIFICATE

This is to certify that Mohd. Usman Siddiqui a student BBA III year has completed the

dissertation project report on IMPACT OF FDI ON UNORGANISED RETAIL SECTOR

OF INDIA Under my guidance and supervision.

The dissertation work of the student is found to be satisfactory for submission for award of

degree of bachelor of business administration. I wish him all the best for his future endeavor.

Noor Alam Khan

Assistant Professor

Faculty of Management And Research

Integral university

ACKNOWLEDGEMENT

Working on this project was great challenge. I take this opportunity to express my gratitude to all

those who helped me in completion of my project successfully.

I owe a never - ending debt of gratitude to Prof. Dr Aftab Alam (Dean ) Faculty of Business

Management, Dr Adeel Maqbool (H.O.D) Faculty of Business Management , for his expert

guidance and support.

I would like to thank my project guide Mr Noor Alam Khan for giving their valuable time and

providing useful and fruitful information about this project.

I am also grateful to all those who have either directly or indirectly contributed towards the

completion of the project, for their support and encouragement.

CONTENTS

1. BRIEF PROFILE OF THE STUDY

2. CONCEPTUAL DESCRIPTION OF TOPIC

3. OBJECTIVE

4. RESEARCH METHODOLOGY

5. ANALYSIS AND INTERPRETATION OF DATA

6. FINDINGS,

7. CONCLUSION

8. SUGGESTIONS

9. LIMITATIONS OF THE STUDY

10. REFERENCE:

11. ANNEXURE

IMPACT OF FDI ON UNORGANISED RETAIL SECTOR OF INDIA

Page 1

EXECUTIVE SUMMARY

Theory and practice are the two eyes of the management education. Management education

without practical training at an organization remains incomplete. The training prescribed by the

Integral University student have various objectives like helping the student to acquire

knowledge, give an opportunity to know the difference between theory and practice, enable the

student to interact with experienced and knowledgeable persons of business world .

As a student of Bachelor in Business Administration, I got an opportunity to undergo on a

training. The training title is “IMPACT OF FDI ON UNORGANISED

RETAIL SECTOR OF INDIA”

I successfully completed my training report within the specified time. It was really a thrilling

experience for me with senior officials of Industry and to interact with different members,

employees of the organization. It was an experience of enjoyment through hard work and

dedication.

Through this finding of this report, I hope that the Industry in India as well as outside the country

will benefit.


Page 2

INTRODUCTION


Page 3

INTRODUCTION

As per the current regulatory regime, retail trading (except under single-brand product retailing

— FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a

company to be able to get foreign funding, products sold byit to the general public should only

be of a single-brand‘; this condition being in addition to a few other conditions to be adhered to.

India being a signatory to World Trade Organisation‘s General Agreement on Trade in Services,

which include wholesale and retailing services, had to open up the retail trade sector to foreign

investment.

There were initial reservations towards opening up of retail sector arising from fear of job

losses, procurement from international market, competition and loss of entrepreneurial

opportunities. However, the government in a series of moves has opened up the retail sector

slowly to Foreign Direct Investment (―FDI‖). In 1997, FDI in cash and carry (wholesale) with

100% ownership was allowed under the Government approval route. It was brought under the

automatic route in 2006. 51% investment in a single brand retail outlet was also permitted in

2006. FDI in Multi-Brand retailing is prohibited in India.

All Indian households have traditionally enjoyed the convenience of calling up the corner

grocery "kirana" store, which is all too familiar with their brand preferences, offers credit, and


Page 4

applies flexible conditions for product returns and exchange. And while mall based shopping

formats are gaining popularity in most cities today, the price-sensitive Indian shopper has

reached out to stores such as BigBazaar mainly for the steep discounts and bulk prices. Retail

chains such as Reliance Fresh and More have reportedly closed down operations in some of their

locations, because after the initial novelty faded off, most shoppers preferred the convenience

and access offered by the local kirana store.

So how would these Western multi-brand stores such as Wal-Mart and Carrefour strategies their

entry into the country and gain access to the average Indian household? Wal-Mart has already

entered the market through its partnership with Bharati, and gained opportunity for some early

observations. The company's entry into China will also have brought some understanding on

catering to a large, diverse market, and perspectives on buying behaviour in Asian households.

Carrefour on the other hand has launched its wholesale cash and carry operations in the country

for professional businesses and retailers, and will now need to focus more on understanding the

individual Indian customer.

As such, these retail giants will try to gain from some quick wins while reaching out to the

Indian consumer. For one, they will effectively harness their expertise with cold storage

technologies to lure customers with fresh and exotic vegetables, fruits and organic produce.

Secondly, they will also emphasise on the access that they can create for a range of inspirational

global foods and household brands. Thirdly, by supporting domestic farmers will try ensuring

supplies of essential raw materials to them.


Page 5

Surely, these should engage shoppers' and farmers interest–but what needs to be seen is whether

they can effectively combine these benefits, with the familiarity ,convenience and personalized

shopping experiences that the local "kirana" stores have always offered.

NEW DELHI: With an estimated $25 billion worth FDI in its kitty during 2014, the government

is eyeing a quantum jump in the foreign capital hitting Indian shores in the new year as it hopes

to reap the fruits of further opening up of defence, railways and insurance sectors among others.

The ambitious 'Make in India' programme, launched by Prime Minister Narendra Modi with

much fanfare in 2014, is another big-ticket ride that the government expects the foreign investors

to take to bring billions worth dollars of FDI into the country.

Showing its commitment to fast-track the reform process, the government has taken ordinance

route to increase foreign investment limit in the insurance sector to 49 per cent, from 26 per cent

currently. Besides, it has also liberalised foreign direct investment (FDI) policy for medical

devices.

However, a lot will depend on the government's efforts to improve ease of doing business, where

India ranks poorly at 142nd position and the Prime Minister has set a target to bring this rank to

top-50.

Experts and government officials are optimistic that the various initiatives taken by the

government would yield results in 2015.

"Government's initiatives to improve ease of doing business and opening up of FDI in defence,

railways and construction would boost FDI in 2015," a senior official said.

Experts also say that the global sentiment has turned very positive for India.

http://economictimes.indiatimes.com/topic/FDI

http://economictimes.indiatimes.com/topic/Narendra%20Modi

http://economictimes.indiatimes.com/topic/foreign%20direct%20investment


Page 6

"Global sentiments towards India is extremely positive. Foreign firms are looking at India very

keenly. The measures announced in 2014 and the proposed steps will help in attracting more FDI

In 2015," Head of Tax and expert on FDI with corporate law firm Amarchand & Mangaldas

Krishan Malhotra said.

However, no big-ticket investment has been announced by any foreign company as yet.

Seeking to streamline the foreign investment regime, the commerce and industry ministry has

also proposed to introduce a composite cap which will include FDI, FII and other instruments in

various sectors.

In terms of foreign inflows, FDI is estimated to have grown to over USD 23 billion till October

this year, as against about USD 22 billion in the same period last year and over USD 26 billion in

the entire 2013.

India needs around USD 1 trillion worth investments between 2012-13 and 2016-17, the 12th

Five Year Plan period, to fund infrastructure growth covering sectors such as ports, airports and

highways.

As regards to the controversial FDI policy in multi-brand retail, the new government has not

reversed the policy of allowing global super market chains to open stores in India. But

interestingly it has said that it would not entertain any application in this regard.

Under the 'Make in India' campaign, the Prime Minister has asked foreign and domestic firms to

set up manufacturing units in the country to create jobs and boost economic activities in the

country.


Page 7

IMPACT OF FDI ON UNORGANISED

RETAIL SECTOR OF INDIA

IMPACT

FOREX RESERVE

As the limit is increased to 51% in the multi brand retail, the direct investment from abroad

called FDI would inflow to start the business. The inflow of capital would increase the capital

reserve in the Balance of payment which shows the ability of the nation in terms of Forex.

Farmers

The one of the current problem of Indian economic is fiscal deficit which is mostly caused by

subsidy give to the farmers which is considered as unproductive. The one way to cut such

subsidy is to make the farmers independent by making the system securing them to be paid good

price for the commodity. The organized retailers that are capital giant are able to purchase

directly from the farmers paying good price. So the government should be ensuring that the

farmers are getting paid the price of what they are eligible to.

SME

In the norms that are instructed to the foreign player, they should purchase 30% of the product

they deal with from the Small and Medium Enterprise. This ensures the development of SME.

The foreign player would like to provide the quality product. The SME would be encouraged to

produce the commodity that is of high quality.


Page 8

Infrastructure

The players are imposed with the restriction of investing 50% of their investment on the Back

end infrastructure. The ruling party in India where the economic development is suffered by lack

of infrastructure is very cautious about to invest in such area. It would become base for economic

in many ways, say transportation.

Distribution

The distribution system is one of the factors determining the cost of the product. As they are

invested in the infrastructure, they could follow JIT. Say Wal-Mart, they are not interested in

expending in the stock maintenance.

Inflation

Inflation is the unruly one which is challenge to the country where the price sensitive people are.

The scale of economy, capital and large turnover are the base by which the lower prices are

offered to the consumer. The entries of multinational players lead to healthy competition that

lowers the price then inflation consequently.

Food Wastage

With the poverty in one side, the wastage of food is on another side in the same country. It

requires the effective distribution system to avoid food wastage. With the good back end

infrastructure, they can able to serve the goods in an optimization way.

GDP

The decline in the GDP mainly due to the agriculture sector is making the economist worry

more. The FDI in retail would improve the GDP by, economist say 0.5%. The booming industry

that has potential capacity would contribute the GDP higher.


Page 9

Employment

The more employment would be created in the country either directly or indirectly where youth

pass out is increasing as much as creation of employment. It would be generated in the

agriculture, manufacturing, service industry which consists of GDP. The more people get

employed would rehabilitate the economic cycle.

Consumers

The ultimate beneficiary from the opening of FDI in multi brand retail is consumer. They are left

to choose the retail that would give them goods at lesser price. The more middle income people

living in India are preferred to have shopping more modern in lesser cost.

Retail Industry

Allowing FDI in multi brand retail would infuse the new blood into the industry that has

potential. Foreign players that are competitive oriented would implement new strategy.

Another Side Impact

Middle Man

The middle man in the supply chain including non-hoarders shall get affected. In the long run,

they will be deprived of trade business that causes unemployment. So it could be matched with

the need of employees by the organized sector by appropriate policy by the government.

Dependability

The country may depend on another country as FDI inflow is increasing where the country

independency is decreasing. The economic growth may become more endangered one depending

on another country economic. The capital giant may dominate the industry exceeding the

domestic player. The revenue would outflow abroad affecting Forex reserve.


Page 10

FDI Policy in India

FDI as defined in Dictionary of Economics (Graham Bannock et.al) is investment in a foreign

country through the acquisition of a local company or the establishment thereof an operation on a

new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is

invested in or to enhance the production capacity of the economy.

Foreign Investment in India is governed by the FDI policy announced by the Government of

India and the provision of the Foreign Exchange Management Act(FEMA) 1999. The Reserve

Bank of India (‗RBI‘) in this regard had issued a notification, which contains the Foreign

Exchange Management (Transfer or issue of security by a person resident outside India)

Regulations, 2000. This notification has been amended from time to time. The Ministry of

Commerce and Industry ,Government of India is the nodal agency for motoring and reviewing

the FDI policy on continued basis and changes in sectoral policy/ sectoral equity cap. The FDI

policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA),

Department of Industrial Policy and Promotion (DIPP).

The foreign investors are free to invest in India, except few sectors/activities, where prior

approval from the RBI or Foreign Investment Promotion Board (‗FIPB‘) would be required.


Page 11

FDI Policy with Regard to Retailing in India

It will be prudent to look into Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy

issued in October 2010which provide the sector specific guidelines for FDI with regard to the

conduct of trading activities.

a) FDI up to 100% for cash and carry wholesale trading and export trading allowed under the

automatic route.

b) FDI up to 51% with prior Government approval (i.e. FIPB) for retail trade of Single Brand‘

products, subject to Press Note 3 (2006 Series).

c) FDI is not permitted in Multi Brand Retailing in India.

FDI in ‗Single brand‘ retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship

brand in India, those retail outlets could only sell products under the Adidas brand

and not the Reebok brand, for which separate permission is required. If granted

permission, Adidas could sell products under the Reebok brand in separate outlets.

As per the current regulatory regime, retail trading (except under single-brand product retailing

— FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a

company to be able to get foreign funding, products sold by it to the general public should only

be of a ‗single-brand‘; this condition being in addition to a few other conditions to be adhered to.

India being a signatory to World Trade Organisation‘s General Agreement on Trade in Services,

which include wholesale and retailing services, had to open up the retail trade sector to foreign

investment. There were initial reservations towards opening up of retail sector arising from fear


Page 12

of job losses, procurement from international market, competition and loss of entrepreneurial

opportunities. However, the government in a series of moves has opened up the retail sector

slowly to Foreign Direct Investment (―FDI). In 1997, FDI in cash and carry (wholesale) with

100% ownership was allowed under the Government approval route. It was brought under the

automatic route in 2006. 51% investment in a single brand retail outlet was also permitted in

2006. FDI in Multi-Brand retailing is prohibited in India.

All Indian households have traditionally enjoyed the convenience of calling up the corner

grocery "kirana" store, which is all too familiar with their brand preferences, offers credit, and

applies flexible conditions for product returns and exchange. And while mall based shopping

formats are gaining popularity in most cities today, the price-sensitive Indian shopper has

reached out to stores such as Big Bazaar mainly for the steep discounts and bulk prices. Retail

chains such as Reliance Fresh and More have reportedly closed down operations in some of their

locations, because after the initial novelty faded off, most shoppers preferred the convenience

and access offered by the local kirana store. So how would these Western multi-brand stores

such as Wal-Mart and Carrefour strategies their entry into the country and gain access to the

average Indian household? Wal-Mart has already entered the market through its partnership with

Bharti, and gained opportunity for some early observations. The company's entry into China will

also have brought some understanding on catering to a large, diverse market, and perspectives on

buying behaviour in Asian households. Carrefour on the other hand has launched its wholesale

cash and carry operations in the country for professional businesses and retailers, and will now

need to focus more on understanding the individual Indian customer. As such, these retail giants

will try to gain from some quick wins while reaching out to the Indian consumer. For one, they


Page 13

will effectively harness their expertise with cold storage technologies to lure customers with

fresh and exotic vegetables, fruits and organic produce. Secondly, they will also emphasise on

the access that they can create for a range of inspirational global foods and household brands.

Thirdly, by supporting domestic farmers will try ensuring supplies of essential raw materials to

them. Surely, these should engage shoppers' and farmers interest–but what needs to be seen is

whether they can effectively combine these benefits, with the familiarity, convenience and

personalised shopping experiences that the local "kirana" stores have always offered.

LITERATURE REVIEW

There is a reasonable amount of literature available on FDI in India, although it is by no means

abundant in the specific area of Retail. Current policy is in a state of flux; hence a review of

literature on the latest policy proposals and arguments for and against changing policy will be the

back-bone of this study. It will enable accurate and relevant questions to be formulated for the

proposed survey questionnaire and provide a good background understanding of the likely causes

of any patterns and trends that may be revealed by the survey. It is important with a review such

as this to ensure that the sources of information are reliable and trustworthy as possible. A broad

range of opinions from institutional and corporate material, to academic and business-orientated

literature as well and as the newspapers/online media internet resources will be reviewed and

each source was considered for its reliability, and potential to misconstrue the truth.


Page 14

Data Sources

Primary Data Sources

The primary data sources in this research were collected via an emailed survey questionnaire.

We designed a test survey to be emailed to a pre-selected 'test-sample'. The final survey was then

sent out to a significant sample of Indian retailers and others in retail-related industries.

Secondary Data Sources

a.) Internet :- Searching the internet extensively the starting point of this research and provided

some valuable secondary data. Website such as the Government of India's Ministry of Finance

www.finmin.nic.in which provides information on current FDI policy through the Foreign

Investment Promotion Board (FIPB), and also provides press releases and data and statistics have

been useful. The report also references some small domestic industry group's website useful, and

other trade lobby sites. Center for Policy One particular notable internet resource was the

Alternatives (www.cpasind.com) which have provided particularly informative reports on some

of the key issues with FDI in Indian Retail.

b.) Academic Books :- There is a vast amount of literature on FDI ingeneral; however there is

less on FDI in India, and limited amounts that are specifically focused on the retail sector. The

available texton general FDI were useful background research though, and the more specific

texts such as 'FDI in Retail Sector India' by Arpita Mukherjee & Nitisha Patel and

'Multinationals in India' by Amar Nayak were utilized to a greater extent as this report

considered them to be far more relevant to the debate on this research topic.


Page 15

c.) News Articles and Industry Reports :- To obtain up to date information and opinions on the

research topic it was necessary to refer to domestic and international news articles and gather a

variety of industry reports and papers, for example the India Brand Equity Foundation (IBEF)

report on India's Retail Market & Opportunities, and India FDI Watch's report in association with

the Association of Community Organizations for Reform Now (ACORN). All of these helped to

provide a wide and balanced understanding of the key issues of this research.


Page 16

Limitations of Research Study

Survey Response Limitations

Due to the nature of the survey being internet/online-based, it was inevitable that this would have

limitations on survey response; however this was counterbalanced by using a very large sample

base. Survey responses were also potentially limited by the length of the survey and by language

barriers.

Inconsistency of Data & Statistics available on FDI / Retail in India

We noted that data available, particularly in relation to India's retail sector, was often

inconsistent. However, for the purposes of this research being more of an exploratory nature, this

did not have too much impact on the findings. Up-to-date data was also hard to source.


Page 17

Retailing inIndia is one of the pillars of its economy and accounts for 14to15%ofits GDP. The

Indian retail market is estimated to be US$ 450billionand one of the top five retail markets in

the world by economic value. India is one of the fastest growing retail markets in the world,

with 1.2 billion people. India's retailing industry is essentially owner manned small shops .In

2010, larger format convenience stores and super markets accounted for about 4%of the

industry, and these were present only in large urban centers. India's retail and logistics industry

employs about 40 million Indians (3.3%ofIndian population). Until 2011, Indiancentral

government denied foreign direct investment (FDI) in multi- brand retail ,for bidding foreign

groups from any ownership in supermarkets, convenience stores or any retail outlets. Even

single –brand retail was limited to 51% ownership and a bureaucratic process.

In November 2011, India's central government announced retail reforms for both multi-brand

stores and single-brand stores. These market reforms paved the way for retail innovation and

competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single

brand majors such as IKEA, Nike ,and Apple . The announcement sparked intense activism

,both in opposition and in support of there forms .In December 2011,under pressure from the

opposition, Indian government placed the retail reforms on hold till it reaches a consensus.

In January2012, India approved reforms for single-brand stores welcoming anyone in the world

to innovate in Indian retail market with 100%ownership, but imposed the requirement that the

single brand retailer source 30% of its goods from India. Indian government continues the hold

on retail reforms for multi-brand stores. IKEA announced in January that it is putting on hold

its plant open stores in India because of the 30% requirement. Fitch believes that the 30%

http://en.wikipedia.org/wiki/United_States_dollar

http://en.wikipedia.org/wiki/1000000000_%28number%29

http://en.wikipedia.org/wiki/Walmart

http://en.wikipedia.org/wiki/Walmart

http://en.wikipedia.org/wiki/Tesco

http://en.wikipedia.org/wiki/IKEA

http://en.wikipedia.org/wiki/Nike,_Inc.

http://en.wikipedia.org/wiki/Apple_Inc.

http://en.wikipedia.org/wiki/Retailing_in_India#cite_note-ft22012012-7


Page 18

requirement is likely to significantly delay if not prevent most single brand majors from Europe

,USA and Japan from opening stores and creating associated jobs in India.

IMPACT OF FDI ON AGRO PRODUCTS

India has emerged as a major player in the global agriculture market. Indian agriculture exports

during 2012-2013 were US$ 41 billion against agriculture imports of US$ 20 billion, with an

output of net trade surplus of US$ 21 billion.

Having a good rainfall, the agriculture sector in India is likely to grow in the range of 5.2-5.7 per

cent in 2013-14 agriculture year (July-June), nearly three times more than the last year. The farm

sector had grown at 1.9 per cent last fiscal.

In 2012-13, the share of exports of agricultural and processed food products in overall exports

rose to 10.6 per cent. Total exports of Indian agricultural and processed food products during

April–November 2013 stood at US$ 14,515.10 million as compared to US$ 13,281.47 million

during the same period last year, according to data released by the Agricultural and Processed

Food Products Export Development Authority (APEDA).

FDI would also bring investment in post-harvest infrastructure that would increase the shelf-life

of produce and minimize food wastage (now as high as 20-30%). Moreover, new investment

would result in other positive externalities such as better seeds and stricter standards that would

increase quality and productivity while lowering costs .

http://www.seedbuzz.com/knowledge-center/article/impact-of-fdi-on-indian-agriculture-economy

http://www.seedbuzz.com/knowledge-center/article/impact-of-fdi-on-indian-agriculture-economy


Page 19

Conclusion:

The subsequent development of the Indian agriculture sector through FDIs is predicted to have a

significant positive impact on the 700-million strong rural populations, living in about 600,000

small villages of India. Rapid investments in technology development, irrigation infrastructure,

emphasis on modern agricultural practices and provision of agricultural credit and subsidies are

the major factors contributed to agriculture growth. FDI in Indian agriculture sector increase

employment opportunities. FDI remains permanent in the host country because of the

development in the infrastructures of the host country. Therefore, there exist the long run

relationship between level of GDP and foreign capital stock

OBJECTIVES OF STUDY

To find out the impact of FDI on unorganized retail sector of India

To find out the impact of FDI on Agro Products


Page 20

RESEARCH METHODOLOGY

RESEARCH :-

The activities of market research include defining marketing opportunities and problems,

generating and evaluating marketing ideas, monitoring performance and understanding the

marketing process. The methodology of the study included selection of sample, study/ survey if

library references, collation and compilation of the primary and secondary data and information

obtained through structured questionnaires, open ended interview. The method of research was

deductive as conclusive would be drawn after the analysis and interpretation of data collected.

Research is a structured enquiry that utilizes acceptable scientific methodology to solve problems

and create new knowledge that is generally applicable.

Scientific methods consist of systematic observation, classification and interpretation of data.

The process used to collect information and data for the purpose of making business decisions.

The methodology may include public research , interviews, surveys and other research

techniques and could include both present and historical information.


Page 21

Data collection-

1.Primary Data –Primary research consists of a collection of original primary data collected by

the researcher.

It is often undertaken after the researcher has gained some insight into the issue by reviewing

secondary research or by analysing previously collected primary data.

It can be accomplished through various methods, including questionnaires in the physical

sciences, amongst others.

For my study through Questionnaire and interaction

2. Secondary Data– through internet, articles magazines etc.

Secondary data is data collected by someone other than the user. Common sources of secondary

data for social sciences include censuses, organisational records and data collected through

qualitative methodologies or qualitative research. Primary data, by contrast are collected by the

investigator conducting the research


Page 22

Research Design:

Descriptive

A descriptive study is one which information is collected without changing the environment (

i.e., nothing is manipulated).

Sampling

A statistical method of drawing representative data by selecting people because of the ease of

their volunteering or selection units because of their availability or easy access.

Universe

Lucknow city

Sample size

25 Respondents


Page 23

DATA ANALYSIS

AND

INTREPRETATION


Page 24

PART A:

Q1) AGE

FREQUENCY PERCENTAGE

20-30 10 40

Above 30 15 60

Total 25 100

INTERPRETATION

According to the pie chart we can say that 40% respondents are between 20-30 and 60%

respondents are above 30.

40

6020-30

Above 30


Page 25

Q2) GENDER :-


MALE 25 100

FEMALE 0 0

TOTAL 25 100

INTERPRETATION :-

100

00

20

40

60

80

100

120

MALE FEMALE

Series 3

Series 2

Series 1


Page 26

According to the chart we can say that there are 25 respondents as male and 0 females.

Q3) INCOME :- (YEARLY)


20,000-40,000 5 20

50,000-70,000 5 20

More than 70,000 15 60

Total 25 100

INTERPRETATION:-

According to this chart we say that the income of 10 respondents is between 20K to 70K

INCOME

20,000-40,000

40,000-70,000

More than 70,000


Page 27

and the income of 15 respondents is more 70K (Yearly)

PART B :-

Q1) PRODUCTION OF AGRO PRODUCTS YEARLY. (IN Kg’s)

INTERPRETATION:-

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

100-200 300-400 More than 500


100-200 10 40

300-400 12 48

More than 500 3 12

Total 25 100


Page 28

According to the above pie chart 88% of the farmers group are able to produce upto the

quantity 400kg and the rest12% are able to produce more than 500kg per year.

Q 2).LOANS FROM BANK AND OTHER INSTITUTION FOR THE PRODUCTION

OF THE AGRO PRODUCTS.

a) YES

b) NO


YES 12 48

N0 13 52

Total 25 100


Page 29

INTERPRETATION :-

According to the above pie chart its clear that 48%use to take loan and rest 52% not.

Q3) DO YOU KNOW ABOUT THE AGRICULTURAL POLICIES OF THE INDIAN

GOVERNMENT.

a) YES

b) NO


YES 10 40

NO 15 60

Total 25 100

LOAN

YES

N0


Page 30

INTERPRETATION :-

According to the study its shown that 40 % are known to it and 60% are unknown.

Q 4) DO YOU KNOW ABOUT THE FDI IN AGRICULTURAL SECTOR.

a) YES

b) NO

FREQUECY PERCENTAGE

YES 20 80

NO 5 20

Total 25 100

YES

N0


Page 31

INTERPRETATION :-

In the above mentioned chart 80% are knowing the FDI’s of Govt. and rest 20% are

unknown.

Q 5) ARE YOU IN FAVOUR OF FDI BY GOVERNMENT.

a) YES

b) NO


YES 10 40

NO 15 60

Total 25 100

% KNOWING ABOUT THE FDI

YES

NO


Page 32

INTERPRETATION :-

40% are in favour of FDI and rest 60% aren’t as shown above

Q 6) DO YOU BELIEVE THAT LIFTING RESTRICTIONS ON FDI IN RETAIL

SECTOR WILL ALLOW MORE INVESTORS.

a) YES

b) NO


YES 18 72

NO 7 28

Total 25 100

0%

10%

20%

30%

40%

50%

60%

70%

YES NO

IN FAVOUR OF FDI


Page 33

INTERPRETATION :-

72% are in favour to remove the restriction and the rest 28% are not according to

the above pie chart.

Q 7) ARE YOU IN FAVOUR THAT RESTRICTION ARE BINDING THE

TECHNICAL SKILLS.

a) YES

b) NO


YES 14 56

NO 11 44

Total 25 100

LIFTING RESTRICTION IS HELPFUL

YES

NO


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INTERPRETATION :-

56% believe that restrictions are hampering the technical skill and 44% are not

in favour.

Q 8) DOES THE GOVT. BOUNDARIES OF FDI EFFECTS CONSUMERS

CHOICE.

a) YES

b) NO


YES 16 64

NO 9 36

Total 25 100

RESTRICTIONS ARE BOUNDINGS

YES

NO


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INTERPRETATION :-

64% are in favour and the rest 36% are not as shown above.

Q 9) ARE YOU ABLE TO AVAIL ALL THE BENEFITS OF FDI .

a) YES

b) NO


YES 15 60

NO 10 40

Total 25 100

EFFECTS OF GOVT. POLICY

YES

NO


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INTERPRETATION :-

60% are availing the FDI benefits and the rest 40% aren’t.

Q 10) FDI IS PROFITABLE FOR GOVERNMENT AS WELL AS AGRO SECTOR.

a) YES

b) NO


YES 18 72

NO 7 28

Total 25 100

AVAILING THE PROFIT

YES

NO


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INTERPRETATION:-

72% think that its right and the rest 28% oppose as shown above.

FINDINGS

After analyzing the FDI in Indian retail sector by relating it to the agricultural products

my findings from the study are :-

Due to the absence of the efficient way of production few farmers are not able to

produce the agro products at their extent.

Due to illiteracy a large number of farmer group are still unknown to the norms

of the government regarding the FDI.

FDI PROFITABLE FOR AGRO AS WELL AS GOVT.

YES

NO


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A large group of farmers are not in the support of FDI as they think that it’s not

of their worth.

A large number of the farmer group are againts the restriction of the FDI norms

of the government as they think tat it’s effecting the agro products production in

the different way.


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SUGGESTION FOR RETAIL SECTOR

Much of the Indian retail trade (particularly grocery) still has traditional features: small family-

run shops and street hawkers dominate the situation in most of the country. However, the retail

trade in India is now undergoing an intensive structural change which could cause irreversible

damage to local commodity supply chains and competition. The existing regulations are not

adequate to fulfil the new requirements. India can learn (and perhaps forestall loss of genuine

competition and product variety) from the experience of south-east Asian countries which are

improving regulatory frameworks and some advanced retailing economies like Germany which

are already considered more successful regulators in this sector. German competition policies in

content and implementation are significant for India to the extent that they are different from

other advanced retailing countries like the US and Great Britain. German policy now proactively

aims to preserve small and medium competitors in retail sector.

SUGGESTION OF AGRICULTURAL SECTOR

The government of India has allowed foreign direct investment in the fertilizers industry of the

country. Foreign Direct Investment (FDI) in fertilizers in India is allowed up to 100% under the

automatic route in India. The various advantages of FDI inflows into fertilizer industries are

growth, quality, improved technology and expansion of fertilizer industry that will result in the

generation wide range of qualitative agro products. It is widely believed that these steps will aid

in the growth of agriculture infrastructure in the country and will benefit the sector in the long

run.


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Conclusion The discussion above highlights:

Small retailers will not be crowded out, but would strengthen market positions by

turning innovative/contemporary.

Growing economy and increasing purchasing power would more than

compensate for the loss of market share of the unorganised sector retailers.

There will be initial and desirable displacement of middlemen involved in the

supply chain of farm produce, but they are likely to be absorbed by increase in the food processing sector induced by organised retailing.

Innovative government measures could further mitigate adverse effects on small

retailers and traders.

Farmers will get another window of direct marketing and hence get better

remuneration, but this would require affirmative action and creation of adequate

safety nets.

Consumers would certainly gain from enhanced competition, better quality,

assured weights and cash memos.

The government revenues will rise on account of larger business as well as


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recorded sales.

The Competition Commission of India would need to play a proactive role.

Thus from developed countries experience retailing can be thought of as developing

through two stages. In the first stage, modern retailing is necessary in order to

achieve major efficiencies in distribution. The dilemma is that when this happens it

inevitably moves to stage two, a situation where an oligopoly, and quite possibly a duopoly, emerges. In turn this implies substantial seller and buyer power, which may

operate against the public interest.

The lesson for developing countries is that effective competition policy needs to be in

place well before the second stage is reached, both to deter anticompetitive behaviour and to evaluate the extent to which retail power is being used to unfairly

disadvantage smaller retailers and their customers. The sources of retail power need

to be understood to ensure that abuses of power are curbed before they occur. The

more important debate lies in the parameters of competition policy. The benefits

brought by modern retailers must be acknowledged and not unduly hindered. While it is true that some dislocation of traditional retailers will be felt, time will prove that the

hardship brought will not be substantial


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LIMITATIONS

The biggest limitation of this research was time. Due to time constraints, the interviews

were restricted to a very small number.

Cost was also disadvantage in the process of the research. The dealers were chosen for

interviews as it was believed that they would give a more generalized view of the whole

market.

However, their answer replicated their specific consumers base and persona choice. If

time is no limitation, the consumers should be directly contacted for the assessment.


Page 43

BIBLIOGRAPHY


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BIBLIOGRAPHY

Articles/Reports 1. "The Bird of Gold - The Rise of India's Consumer Market". McKinsey

and Company. May 2007.

2. Anand Dikshit (August 12 2011). "The Uneasy Compromise - Indian

Retail".The Wall Street Journal.

3. "Winning the Indian consumer". McKinsey & Company. 2005.

WEBSITES

1. http://www.legallyindia.com/1468-fdi-in-retailing-sector-in-indiapros-

cons-by-hemant-batra

2. http://siadipp.nic.in/policy/changes/pn3_2006.pdf

3. http://dipp.nic.in/DiscussionPapers/DP_FDI_Multi-

BrandRetailTrading_06July2010.pdf


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ANNEXURE

Q1) PRODUCTION OF AGRO PRODUCTS PER YEAR. (IN Kg’s)

a) 100-200

b) 300-400

c) More than 500

Q 2). LOANS FROM BANK AND OTHER INSTITUTION FOR THE PRODUCTION OF

THE AGRO PRODUCTS.

c) YES

d) NO

Q3) DO YOU KNOW ABOUT THE AGRICULTURAL POLICIES OF THE INDIAN

GOVERNMENT.

a) YES

b) NO

Q 4) DO YOU KNOW ABOUT THE FDI’s IN AGRICULTURAL SECTOR.

a) YES

b) NO


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Q 5) ARE YOU IN FAVOUR OF FDI BY GOVERNMENT.

a) YES

b) NO

Q 6) DO YOU BELIEVE THAT LIFTING RESTRICTIONS ON FDI IN RETAIL SECTOR

WILL ALLOW MORE INVESTORS.

a) YES

b) NO

Q 7) ARE YOU IN FAVOUR THAT RESTRICTION ARE BINDING THE TECHNICAL

SKILLS.

a) YES

b) NO

Q 8) DOES THE GOVT. BOUNDARIES OF FDI EFFECTS CONSUMERS CHOICE.

a) YES

b) NO


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Q 9) ARE YOU ABLE TO AVAIL ALL THE BENEFITS OF FDI .

a) YES

b) NO

Q 10) FDI IS PROFITABLE FOR GOVERNMENT AS WELL AS AGRO SECTOR.

a) YES

b) NO