The Emerging Indian Retail Industry

Emerging Indian Retail Industry
The Indian retail industry has emerged as one of the most dynamic and fast-paced industries as a result of competition from several new players. It accounts for over 10% of the Gross Domestic Product (GDP) and around 8% of employment. India is also the world’s fifth largest destination in the retail space.While India’s retail market is expected to grow at a Compound Annual Growth Rate (CAGR) of 10% to US$ 1.6 trillion by 2026, India’s Business to Business (B2B)  e-commerce market is expected to reach US$ 700 billion by 2020.And so it is not surprising that India has replaced China as the most promising market for retail expansion, supported by:• Expanding economy,
• Sky-rocketing consumption rates,
• Urbanizing population, and
• The emergence of the middle class.The Indian retail business has seen Foreign Direct Investment (FDI) inflows of around US$ 1.04 billion between April 2000 and June 2017, according to the Department of Industrial Policies and Promotion. With the need for consumer goods rising daily, especially in the electronics and home appliances sector, there          is a jump in new entrants investing in the Indian retail industry.

And government initiatives to improve the retail industry in India have led to many positive policy changes. The FDI rules in food processing have been changed to allow e-commerce companies and foreign retailers to sell ‘Made in India’ products. The government is also allowing 100% FDI in online retail of goods and services.

Road Ahead


With the expansion of e-commerce, choice of products, especially in terms of getting the lowest price for an item is greatly benefitting the consumer. Touted as the biggest revolution of the retail industry, e-commerce can teach brick-and-mortar retailers how to leverage digital channels to improve reach in tier-2 and tier-3 cities while reducing costs at the same time.

With the two facets working together, both the industry and the consumer will benefit in the long run.