Foreign Direct Investment (FDI) has become a significant driver of economic growth and development across emerging economies, including India. The retail sector, being one of the largest contributors to India’s GDP and employment, has attracted considerable attention from foreign investors following the liberalization of FDI policies. This study examines the influence of FDI on the Indian retail market, focusing on its effects on market structure, competition, employment opportunities, consumer behavior, and overall sectoral growth. Using both qualitative and quantitative analyses, the research highlights how foreign investment has introduced modern retail practices, enhanced supply chain efficiency, and increased consumer choices, while also posing challenges to traditional retail formats. The findings provide insights into the benefits and limitations of FDI in retail, offering valuable guidance for policymakers, industry stakeholders, and investors seeking to understand the evolving dynamics of India’s retail industry. The purpose of this study is to explore the impact of Foreign Direct Investment (FDI) on the Indian retail sector and to understand how it has influenced the market’s growth, competitiveness, and consumer dynamics. The study aims to examine the role of FDI in modernizing retail practices, enhancing supply chain efficiency, and introducing global business standards, while also assessing its effects on employment and opportunities for skill development. Additionally, it seeks to identify the challenges and opportunities that foreign investment presents for traditional retail formats and domestic businesses.