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Important that the domestic retail sector is allowed to grow and consolidate
Under-developed and in a nascent stage
Rise in Real estate costs in Urban areas
Concerns against FDI
Organized Retail Currently Accounts for 5% of India’s Retail Market
With an anticipated $ 50 Billion in fresh investments over next 10 years, modern retail will show impressive CAGR > 25%
And Is Now Entering Expansion Phase IV III II Initiation Manufacturers opening their own outlets Pure play Retailers, realizing the potential start to test waters, Conceptualization Entry of large Indian corporates and Global Retailers Large Investment Commitments by large Indian corporate Expansion by leading Product Brands Increasing Competition Large Scale Consolidation More than 25-30 retail businesses with Revenues in excess of US $ 1 Billion More Aggression from International Players Specialty Formats based on finer segmentation of the market Private brands getting established Movement to Smaller Cities and Rural Areas I Size of Industry Pre 1995 1995 to 2005 2005 to 2010 2010 Onwards Entry of large global retailers Consolidation and Expansion
Will FDI be necessary at all if there is enough domestic capital being injected in to the retail sector ?
If FDI retailers were to acquire say 20% of retail trade, this would equate to Rs. 800 billion of turnover, which would lead to the employment of just 43,540 people, but would displace approximately 8 million people employed in the unorganised retail sector.
Feedback on the the discussion paper was received.
A committee, comprising officials from the ministry of consumer affairs and public distribution, commerce and industry ministry, financie ministry, food processing ministry etc. is looking into the proposals
Ministry of consumer affairs is likely to prepare a cabinet note for the final decision