article source: Times of India Business – June 06, 2016
According to 2016 Global Retail Development Index (GRDI), which ranks top 30 developing countries for retail investment worldwide, a pick up in GDP growth and better clarity regarding FDI regulations have helped india achieve a second ranking.
“India’s strong ranking reflects foreigner retailers’ increased optimism in its retail market and its vast growth potential,” said Debashish Mukherjee, a partner with A T Kearney and co-head of the Consumer Industries & Retail Products Practice for India and Southeast Asia.
“India has relaxed several key Foreign Direct Investment (FDI) regulations in single-brand retail and this has paved the way for multinational firms to enter the market,” Mukherjee said.
India’s retail sector has expanded at a compound annual growth rate of 8.8 per cent between 2013 and 2015, with annual sales crossing the USD 1 trillion mark, according to A T Kearney, a London-based business consultancy.
India has also become the world’s fastest growing economy. That coupled with a large population base and the easing of FDI regulations in the sector has made it an even more attractive market, it said in the ranking.
“We expect to see e-commerce to propel India’s growth and make it a more attractive proposition. However, there are some challenges as well. India remains a challenging and complex market for foreign retailers, where understanding dynamics at the state level is important,” Mukherjee said.
India’s retail sector has also benefited from the rapid growth in e-commerce. India is the world’s second largest internet market and the increasing internet and smartphone penetration is contributing to the expansion of e-commerce.
The GRDI analyses 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities.