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India - The Top Retail Destination

The retail market in India has undergone a major transformation and has witnessed tremendous growth in the last 10 years. By 2020, the retail market in India is set to cross the USD 1 tn mark, growing from USD 672 bn in 2017. India’s e-commerce market is also set to grow at a 30% compound annual growth rate for gross merchandise value to be worth USD 200 bn by 2026.

With the second largest population in the world, a middle class of 600 mn people, increasing urbanisation, rising household incomes, connected rural consumers and increasing consumer spending, India is one of the best countries to invest in retail space.

  •   India has overtaken China to become rank 1 in A.T. Kearney's 2017 Global Retail Development Index
  •   Retail is India's largest industry, currently accounting for over 10% of the country's GDP and 8% of total employment

 

Recent Policy Changes allow 100% FDI in almost all segments in Retail. 
for more details refer FDI Policy 

 

HIGHLIGHTS

  • India Ranked No. 1 in Global Retail Development Index (GRDI) in 2017
  • By 2021, India to have more internet users (650 mn) than entire population of six G7 Countries
  • India to become third-largest consumer economy (consumption expenditure to increase by factor of 3 to reach USD 4 tn) by 2025

Industry Scenario

The Indian retail sector has experienced a healthy growth over last few years achieving a total market size of USD 672 bn in 2017.

The Indian retail market is projected to reach USD 1.3 tn, while on the other hand, Indian e-commerce industry is expected to cross USD 100 bn mark, by 2020.

India’s e-commerce market is also set to grow at a 30% compound annual growth rate for gross merchandise value to be worth USD 200 bn by 2026 and market penetration will increase to 12% from existing 2%.

India is largely an unorganized retail market, contributing 92% to the total retail sector in India. Currently, the organized retail market is valued at USD 60 bn, and the unorganized market holds the rest. The organized retail market is projected to increase to 13% by 2020, with the unorganized market reducing to 87%. Organized retail therefore, has the potential to reach approx. USD 140-160 bn.

Growth Drivers

GD
  • Contribution to India's GDP

    10.0%

  • Share in India's employment

    8.0%

  • Rising consumption

    4X

  • Growing organised retail

    3X

Key policies

Direct Selling Guidelines

Guidelines prepared by the consumer affairs ministry to regulate the Direct Selling industry

FDI policy 2017

Recent updates:

100% FDI allowed in Single Brand retail trading under automatic route.

Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016

Proposes to allow malls, cinema halls, restaurants and other retailing establishments to remain open on all days

FDI Facts

  • FDI inflows (in USD) in retail during November 2014 – November 2017 (Invest India estimate)

  • FDI allowed in Single Brand Product Retail (Online Presence Allowed) under automatic route.

  • FDI allowed in e-commerce (B2B & Marketplace for B2C) under automatic route

  • FDI allowed in Cash & Carry Wholesale Trading under automatic route

  • FDI allowed under Duty-Free Shops under automatic route

  • FDI allowed in Food Product Retail under automatic route

  • FDI is allowed in Multi-Brand Product Retail (Online Presence Not Allowed) under government route.

Recent Investments

  • February 2018 - British tech firm Dyson will invest USD 200 million into its Indian operations over the next five years and will set up 20 stores across Delhi-NCR, Mumbai and Bengaluru.

  • May 2017 - The world’s largest furniture retailer, IKEA, plans to invest USD 3 bn in setting up 25 stores in India,  planning to double their sourcing from India to USD 717 mn from about USD 358 mn

  • November 2017 - Amazon’s third capital infusion of USD 435 mn into its India business this year takes its total investment in Amazon Seller Services to USD 2.6 bn

  • November 2017 - Ahmedabad-based Havmor Ice Cream Ltd has been fully acquired by South Korean major LOTTE Confectionery for USD 153 mn

Major Investors