Sector in India
the present times, Retail and Real Estate
are the two booming sectors of India. If we talk about the boom
in retail sector, the retail sector
is the largest sector in India after agriculture, accounting for over
10 per cent of the country's GDP and around 8 per cent of the employment.
India is one of the most attractive and fast growing destinations
for retailers from all across the globe. Thanks to the entry of corporate,
gradual increase the limit of Foreign
Direct Investment (FDI) in retail sector, increasing influence
of western culture and rising income, changing customer behavior &
lifestyle, the Indian retail industry has
seen phenomenal growth in the last six years (2001-2007). As per the
industry experts, the prospects of Retail and Real
Estate sectors are mutually dependent on each other. Retail,
one of India's largest industries, has presently emerged as one of
the most dynamic and fast growing industries of our times with several
players continuously entering the retail market
in India and investing in developing the infrastructure and
construction of the retailing business.
Retail sector in India has opened up
to the foreign brands. The Indian Government has finally taken steps
towards opening up the retail sector to
foreign investment. In a recent announcement, the Indian Government
stated its intention to allow foreign investment in 'single brand'
retail up to 51% with the remaining 49% to be possessed by Indians.
This policy has attracted a lot of foreign retailers
to expand their business
in India. It is required for the agency responsible for authorizing
foreign investments into retail sector
of the country, to take the permission of the Foreign Investment
Promotion Board, before any investment is made in India. 'Single
brand' retail means that a retail store with foreign investment
can only trade in or sell one brand.
Retail Sector in India is expanding at an
exponential rate. As per the industry experts, India's
retail sector, which is currently valued at nearly $350 billion,
is expected to double in size by 2015. The Indian
Retail Industry is gradually moving ahead towards emerging
the next boom industry.
The following are the main reasons
and trends for growth of Indian retail industry:
- India's economy is booming
- Increase in disposable income and purchasing power of consumers
- Increase in consuming desire
- Low share of organized retailing
- Falling real estate prices
- Increase in expenditure for luxury items
- More nuclear families in urban areas
- Global retail giants entering the retail industry in India
- Favorable reforms initiated by the government of India
With increase in disposable income, the purchasing power of Indian
urban consumer is also growing and branded merchandise in various
categories like Accessories, Apparels, Food, Electronics and even
Jewellery, are gradually becoming lifestyle products. Retailers are
taking benefit of this growth and accordingly are aiming to expand
more and more.
The retails sector in India
is also getting advanced. Modern Large-Format retail, proficiently
connects the producers and the consumers and is helpful to both
in the long run. In India there is an enormous wastage of fresh
fruits and vegetables. In this situation, the Large-Format Retail
provides all important infrastructures to transport the farm produce
to the consumers with lesser wastage. This way leads to the better
returns to the farmers and good quality and less price to the consumers.
Expected Investments in Indian Retail
Retail, one of India's largest industries, has presently emerged
as one of the most dynamic and fast growing industries which is
continuously attracting several players entering the retail
market and expand their business.
As per the sources, followings are some of
the major investment expected to be made in Indian retail industries
Major global retail giants are also expending their business
in India and this which is also one of the key factors in the
growth of the organized retail sector in India.
Some of the major international retail groups who are entering the
organized retail sector in India are:
- Bharti-Wal-Mart will invest approx. US$2.5 billion by 2015.
- Reliance Industries Limited is planning to invest US$ 6 billion
in the organized retail sector in India by opening 1500 supermarkets
and 1000 hypermarkets by 2010-2011.
- Future Group (Pantaloon Retail) will invest US$260 million by
- Metro AG is investing US$400 million over the next three years.
- Pantaloons is planning to invest US$ 1 billion in order to increase
its retail space to 30 million square feet
- New Delhi-based round-the-clock convenience chain Twenty Four
Seven Retail Stores Pvt. Ltd plans to invest US$200 million in
the next five years and targeting an emerging segment of night
Also See: FDI
in Retail Sector in India || Most
competitive spot in modern retailing
- Wal- Mart
- Carrefour SA
- Metro AG