This paper analyse the process and pattern of global finance capital and expected economic consequences on the retail trade in India. The study is based on regression and factor analysis. Government, supported by a number of scholars, perceive positive impact through efficiency, and competitiveness where as others find it exploitative with increasing dependence of developing economies on developed nations. Foreign direct investment (FDI) in India remained quite slow initially but gradually picked up. The FDI in India came in service sectors and to the select metropolitan cities. The debate on FDI in retail sector continues because the retail trade in India is expected to undermine mostly traditional and family business. Though, the retail sector is not fully opened for FDI in India yet the consequences can be foreseen with reference to the nature of retail in the underdeveloped economy. Government of India is all prepared to open the retail market to place the family business in competition to the domestic and global capital. General macroeconomic variables of employment, poverty, GDP share of trade, per capita income, and marginal population, are significantly correlated with retail sector. The main consequences of FDI in retail trade perceived that it will lead to widespread closure of small and traditional retail outlets, sharp decline of non-formal sector, undermining the livelihood and employment opportunities. FDI will cater needs of upper class only. The analysis finally reveals that in the retail sector is closely integrated with the underdeveloped economy and will have adverse effects on the employment.

Download Paper

Download

Yadav, Y.S. & Jauhari, S. (2011)Foreign Direct Investment and Retail Trade in India (The Consequences under Globalization). Skyline Business Journal, Volume 7, Issue 1, pp 34-40.