Trade Analytics
Retail
By 2018, the Indian retail sector is likely to grow at a CAGR of 13 per cent to reach US$ 950 billion.

Indian Retail Industry Analysis

Latest update: December, 2016

Sector's High Growth Potential is Attracting Investors

  • India has occupied a remarkable position in global retail rankings; the country has high market potential, low economic risk, and moderate political risk
  • India’s net retail sales are quite significant among emerging and developed nations; the country is ranked third (after China and Brazil)
  • Overall, given its high growth potential, India compares favourably with global peers among foreign investors
  • With investment of around US$ 511.76 billion, the first half of 2016 witnessed the highest annual private equity (PE) in the retail sector, since 2008.
Passenger vehicle exports from India

Rising Prominence of Online Retail

  • Online retail business is the next generation format which has high potential for growth in the near future. After conquering physical stores, retailers are now foraying into the domain of e-retailing
  • E-commerce is expected to be the next major area supporting retail growth in India. The industry is projected to touch US$ 100 billion by 2020 growing from US$ 30 billion in 2016
  • With growth in the e-commerce industry, online retail is estimated to reach US$ 70 billion by 2020 from US$ 3 billion in 2014
Passenger vehicle exports from India
Passenger vehicle exports from India

 

Last Updated: December, 2016

The Indian retail industry is one of the fastest growing in the world. Retail industry in India is expected to grow to US$ 1.3 trillion by 2020, registering a Compound Annual Growth Rate (CAGR) of 16.7 per cent over 2015-20.

India is the fifth largest preferred retail destination globally. The country is among the highest in the world in terms of per capita retail store availability. India’s retail sector is experiencing exponential growth, with retail development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities. Healthy economic growth, changing demographic profile, increasing disposable incomes, urbanisation, changing consumer tastes and preferences are the other factors driving growth in the organised retail market in India.

India’s population is taking to online retail in a big way. The online retail market is expected to grow from US$ 6 billion to US$ 70 billion during FY15-FY20.

Increasing participation from foreign and private players has given a boost to Indian retail industry. India’s price competitiveness attracts large retail players to use it as a sourcing base. Global retailers such as Walmart, GAP, Tesco and JC Penney are increasing their sourcing from India and are moving from third-party buying offices to establishing their own wholly-owned/wholly-managed sourcing and buying offices.

The Government of India has introduced reforms to attract Foreign Direct Investment (FDI) in retail industry. The government has approved 51 per cent FDI in multi-brand retail and increased FDI limit to 100 per cent (from 51 per cent) in single brand retail, and plans to allow 100 per cent FDI in e-commerce, under the arrangement that the products sold must be manufactured in India to gain from the liberalised regime.123

Sectoral Presentation (December, 2016)

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Retail India

Market size over the past few years (US$ billion)
Retail India

 

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