Dissertation Proposal Page 1 of 6

Benefits and Drawbacks in Allowing

Foreign Direct Investment (FDI) in
Indian Multi-Brand Food and
Grocery Retail Sector

Dissertation Proposal

29th July, 2010

Robert Kennedy College, Zurich

University of Wales
Dissertation Proposal Page 2 of 6

1. Table of Contents
1. Table of Contents..................................................................................2
3. Title.......................................................................................................3
4. Overview...............................................................................................3
5. Research Questions...............................................................................3
6. What are the major benefits to Indian retail business from participation
of foreign players?.....................................................................................4
7. Why did the government allow FDI in single brand retail stores and not
for others?.................................................................................................4
8. Methodology..........................................................................................4
9. Purpose..................................................................................................4
10. Structure of the dissertation................................................................5
11. References..........................................................................................6
Dissertation Proposal Page 3 of 6
2.

3. Title

Benefits and Drawbacks in Allowing Foreign Direct

Investment (FDI) in Indian Multi-Brand Food and
Grocery Retail Sector
4. Overview
The Indian retail industry has seen substantial growth with the advent
of 21 century. The new western lifestyle marts, hyper marts, departmental
st

stores taking slowly but good share of traditionally unorganized Indian retail
sector. Technopak in its study projects 11% share of the organized sector in
Indian retail industry which stood at paltry 3% in 20071.

The industry however is facing lack of funding from various financial

institutions. The government has also not allowed foreign direct investment
into the multi-brand retail stores fearing negative impact on the unorganized
low cost retailers. The government realizing the exponential growth in the
industry is discussing creation of regulatory body2. They are also discussing
with various stake holders on the issue of opening up FDI. This research
paper will dwell into the various benefits and drawback of participation by
big foreign players like Wal-Mart.

The Indian government has opened up the FDI to establish single

brand retail stores. The central intelligence Agency (CIA) estimates that 10%
of the Indian population has access to 31% of the wealth3. This high income
group lives in big cities and has access to these stores. However a major part
of the rest of population are considered as middle class relying on the
traditional “Kirana” stores for their daily needs. The paper will concentrate
on the impact (Positive as well as negative) of FDI on these traditional stores
and the general middle and low income population of India.

5. Research Questions
The paper will attempt to find answers to the following research
questions:

1
http://www.technopak.com/tkc/research.asp?ol=3 [accessed July 29, 2010]
2
http://www.investinindia.com/investmentindia/2010/07/12/indian-retail-industry-opposes-
india-government-proposal-of-retail-regulatory-authority/ [accessed July 29, 2010]
3
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html [accessed
September 23, 2010]
Dissertation Proposal Page 4 of 6
• Why did the government allow FDI in single brand retail stores
and not for others?

• What is the current size, nature of the food and grocery retail
sector today and what is the growth potential?

• How and to what extent the indigenous organized retailers have

penetrated into this highly fragmented industry and how are
they performing? What are their future growth prospects?

• What is the impact of FDI to the small retail “Kirana” stores and
general public?

• What is the role Indian government playing in the growth of this

industry and what more can they do to boost it further?

• What are the main reasons for the government’s reluctance to

open up flow of FDIs in this sector and their possible solutions?

6. What are the major benefits to Indian retail business

from participation of foreign players?

7. Why did the government allow FDI in single brand

retail stores and not for others?

8. Methodology
An extensive review of literature both on internet and books would be
done to gather the major data. An analysis of current government policies
and the ongoing effort by the government in this regard would be carried
out.

The research will mainly depend of the secondary available data. The
research will also generate primary data through a survey that can be posted
on RKC sites and distributed to others through the social networking
channels. for the research but may attempt to seek some primary
information as well by way of questionnaire.

9. Purpose
The main purpose of this research is to really look into the fears of
general public to allow foreign equity in the retail business and identify if it’s
really impact the common rural population of India. It will be an attempt to
show that the traditional and modern retail can not only co-exist but grow
faster together.

The paper also wish to highlight the benefits of open economy to this
sector and how this will benefits the overall growth of the Indian economy.
Dissertation Proposal Page 5 of 6

10. Structure of the dissertation

a. Title Page

b. Abstract/Executive Summary: One page summary of the

research and its finding specifying the methodology used for the research.

c. Acknowledgment

d. Table of Contents

e. Chapter 1: Introduction One page information about the problem

statement and brief results from the research.

f. Chapter 2: Dissertation overview and significance including

definition of FDI.

g. Chapter 3: Indian retail industry details including size and growth

over last decade focusing on the food and grocery sectors. Evaluate the
growth potential of the sector viz-a-viz the traditional stores.

h. Chapter 4: Current government FDI policy for retail industry in

general and Food and Grocery sector in particular.

i. Chapter 5: Evaluating the current level of participation of

organized retailers and the potential for growth.

j. Chapter 6: Impact of FDI on the business of traditional stores.

k. Chapter 7: Impact on the growth of the food and grocery sector.

l. Chapter 6: Conclusion

m. Chapter 7: References and bibliography

Dissertation Proposal Page 6 of 6

11. References
Gakhar Kamlesh, 2006. Foreign Direct Investment in India 1947 to 2007 :
Policies, Trends and Outlook. New Delhi : New century Publications

Invest in India (2010) ‘Indian Retail Industry opposes India government

proposal of retail regulatory authority’
http://www.investinindia.com/investmentindia/2010/07/12/indian-retail-
industry-opposes-india-government-proposal-of-retail-regulatory-
authority/ [accessed July 29, 2010]

Shandilya T K & Thakur Anil Kumar, 2008. Foreign Direct Investment In

India : Problems And Prospects. New Delhi: Deep & Deep Publications Pvt.
Ltd

Technopak Advisors Pvt Ltd (2010) ‘Overview of India’s Consumer and

Retail Sector’ http://www.technopak.com/tkc/research.asp?ol=3 [accessed
July 29, 2010].

The world Fact book, 2005. Central Intelligence Agency,

https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
[accessed September 23, 2010]