Fdi in Healthcare Retail and Its Impact on Employment in India

Topics: Retailing, Shopping mall Pages: 14 (4343 words) Published: November 1, 2011


Research Scholar: N.Chandrasekhar


Topic Page

Introduction 2

Objectives 10

Methodology 11

Review of Literature 14

Suggestions and Recommendations 21

Related papers by scholar 23

References 24


The economic health of a nation is indicated by the amount of foreign direct investment it attracts. The developed nations have enjoyed benefits of the FDI and continue to do so. This fact is not surprising, as it is these very traits exhibited by such economies which have been instrumental in building this situation-essentially a good, consistent and performing economy which offers assured returns over an extended period of time. Ultimately it is the credibility of a country as a ‘brand’ which in fact is decided by its economic health. Tables 1 & 2 serve to demonstrate this aspect with reference to India. Table 1


Table 2
Do the above figures justify the introduction of FDI in retail? This is what this research study proposes to explore besides the quantum and the consequent impact particularly on employment in this sector. There are a number of economies in our world addressed as “third world” economies or ‘developing economies’. The development of a country is measured with statistical indexes such as income per capita, GDP, life expectancy, rate of literacy etc... The United Nations has developed the “Human Development Index” (HDI) a compounded indicator of the above statistics to gauge the level of human development. Developing countries are in general countries which have not achieved a significant degree of industrialization relative to their population and which have in most cases a low standard of living. As per World Bank estimates 456 million people live below the international poverty line of $ 1.25 per day. In India 300 hundred million Indians will go to bed hungry every night which is 4 out of 10 Indians. There could be a further segregation of such economies based on the traits exhibited by some of these Third World (developing) economies taking into consideration factors like, market potential, industrial growth, demographics, political stability, unemployment scenario and a horde of other factors, which impact the overall economy of the country.

A good number of developing economies in turn offer growth opportunities for the developed economies, due to the fact that most of the developed economies are at a maturity stage and look for growth outside their national boundaries. This results in providing the ‘new blood’ to the system which is otherwise healthy. India and China are providers of such opportunities to the developed economies like USA, UK, and Germany. While China has taken this initiative of welcoming FDI earlier since the late 1970’s; India has acted on this issue progressively from the early 90’s. (Refer page 13). There are two routes for investing in India: one the automatic route which does not require prior permission excepting that the Reserve Bank of India should be informed within 30 days of investment and the second route through prior permission and approval.

Certain sectors have received early recognition in this regard, and FDI inflows have greatly impacted growth of these sectors including defense production, FM broadcasting, etc…

One of the sectors which have been put on the back burner is “retail” which again has witnessed a lot of debates and turbulent responses from the trade as such. (Refer figure A...

References: Douglas H Brooks (2005) deals with the concept of FDI and its impact on the country’s economy. The author specifically refers to six Asian economies (excluding India) and the various policy implications.
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