Retail segment owing to their contribution to the overall GDP is considered as a growth trigger by all nations especially the developing ones. The retail sector contributes heavily to the GDP of the nation in countries like India and China.

Both consumption driven and production driven economies have identified the need for balancing and sustaining a healthy retail environment for achieving economic growth.

The after effect of globalization in the modern business scenario is the increased Foreign Direct Investments happening in the retail space.

More and more global players are eying the developing countries and their consumption market to lay the roots of their retail chains. To cater the needs of the growing and changing society these global giants are invited for direct as well indirect investments.

In a economy where the consumer behavior is more to accept and welcome the diversified product portfolio offered by the global giants, doubts have arise on the future prospects of these Foreign Direct Investments or FDIs.

The general trend to adapt to the western or developed economy living style of the people in developing nations is another blessing in disguise for the global retail giants.

The incapability of the local or traditional retailers to offer the world class facility, delivery model and distribution and supply chain management of the same standards offered by the retail giants is another reason for welcoming the FDIs.The FDIs will be more concentrated on the urban areas due to the lack of potential in the rural areas.

This may create cultural imbalances and variations in customer behavior. The FDIs in the retail segment are looked upon on caution as it is feared that they may wash out completely the local retailers.

The large investments in the urban areas in retail space may create new jobs but it would be at the expense of already existing jobs in small stores. In developing countries, it is still a question of debate whether to allow foreign direct investments in retail space. The Foreign Direct Investments in the retail environment will destroy the level playing field in the retail space and may affect the small retailers adversely if not properly controlled.