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India’s retail to grow at ten per cent

The Indian retail market is expected to grow at a CAGR of 10 per cent from 2016 to 2026. The market accounts for over 10 per cent of the country’s gross domestic product and around eight per cent of employment.

India is the world’s fifth largest global destination in the retail space. In the last couple of years, international single brand retailers like Ikea and H&M have entered India. Healthy economic growth, changing demographic profiles, increasing disposable incomes, urbanisation as well as changing consumer tastes are some of the factors driving growth in the organised retail market in the country.

Moreover 100 per cent foreign direct investment in single brand retailing has got the green single. This is expected to help organised sector grow by allowing more players to participate. This FDI approval makes that experimentation process more automatic and economical from a resource management perspective. Also, if a brand has a financial alignment with an investor, it can now close that deal much faster, instead of months going back and forth and risking jeopardising the deal.

One of the major issues faced by international brands is to meet the 30 per cent target for local sourcing by their Indian units after five years of setting up. Many brands see it as a restriction as not many want or can afford to have 30 per cent sourcing for the Indian market itself.

 
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