Retail sector in India is quite an unchartered territory, with a potential far from abundant but reserved still, to the “mom and pop” shops in narrow streets and rich pavements. Currently, a US$ 450 billion industry, expected to double by 2015, adding 22% to the National GDP and seizing 8% employment, still comprises of only 6% organized retail, a question as well as an answer in itself.
The world was quite confident that India, the fourth most lucrative nation for retail investment as per GRDI index would open up multi-brand retail to FDI, but what was a colossal epidemic in 2007 still remains. And though economic progress may glide, the political parties are not ready to bet on their chances in the next election when 94% of the unorganized retail sector, the bread and butter for many Indian families is shredded by Global corporations, and of-course they have made up several arguments to conjure the unfitting FDI. The Indian Government however has been keen to exploit and harness the retail sector, and has been making changes in policies to restore faith and further indicate narrowing gap for foreign companies. For instance, single-brand retail is to get 100% FDI as per the latest announcements, which was 51% earlier. Also, an attempt was made to appease global investors by allowing 51% FDI in multi-brand retail, which would have allowed Wal-Mart, Tesco and Carrefour to enter Indian markets but the move has suffered a setback and is under advisory, due to inconsistent ideologies among national groups. Continue reading