BOOM IN THE INDIAN RETAIL SECTOR
Added: (Tue Apr 04 2006)
Pressbox (Press Release) -
The retail sector in India properties is one of the prime indicators of economic health of India. The importance of retail sector can be gauged from the fact that retailing is the second largest industry in terms of number of employees and establishments in the US. Who has not heard of Wal-mart and its contribution to the US economy?
Indian retail sector belonging to India Real Estate accounts for about 9-10% of the country's GDP. It remains one of the least developed sectors in India. According to Associated Chambers of Commerce & Industry (ASSOCHAM), the estimated annual retail sales accounts for about $ 6 billion and is expected to reach $ 17 billion dollar mark by the year 2010. Historically, the Indian retail sector is dominated by sole proprietorship mostly governed by old principles of business inheritance. The perception is now changing with Indian government, under pressure from the US and other western countries, deciding to gradually increase the limit of Foreign Direct Investment (FDI) in retail sector.
The decision is fuelled by booming economy and the positive reports of leading retail assessors of the world. The favorable business environment in the country is indicated by the increased NRI investment in India since the past few years. The Non resident Indians are also putting added pressure on the government to open up the retail sector in India for the FDI as the prices of commercial property in India are already on the upswing and the ever-increasing spending power of the consumers lend positive air to the business environment in the country.
The Indians have just started to feel the malls, cineplex, multiplex culture that has revolutionized the west. All the major global players like Wal-Mart, Tesco and others are keen to enter the Indian retail market with a bang. A T Kearney has ranked India 5th out of 30 most attractive retail markets in terms of investment.
It is being estimated that if the government timely adopts the favorable policies, then by 2009 the retail industry will start appreciating by the rate of 25-30 % per year. Further, millions of jobs are expected to be generated by the retail sector. Integrated retailing (retail-cum-entertainment) – a sub-division of retailing – is already booming in tier cities of India. And with the liberalized policy of FDI in retail sector, the things can only get better.