FDI has become a key part of national development strategies for many countries for boosting domestic capital, productivity & employment which are very crucial for economic growth. The recent clamor about opening up the retail sector to FDI becomes a very sensitive issue, with argument to support both sides of the debate. It is widely acknowledged that FDI can have some positive results on the economy. Supporters of FDI in retail trade talk of how ultimately the consumer is benefited by both price reduction and improved selection brought about by the technology and know-how of foreign player in the market. This is turn can lead to greater output and domestic consumption. But the most important factor against FDI is that it is labour displacing to the extent that it can only expand by destroying the traditional retail sector.