FDI and Indian Retail Sector – The Path Ahead

Indian economy is growing by 8% a year, its stock market rose by nearly 40% in 2005 and foreign investors are flooding in. There are about nine million small grocery shops in India whichever way you measure it, business in India is booming and as the economy grows so does India's middle class. It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011. Many of these people are looking for more choice in where to spend their new-found wealth. The Indian retail sector is now worth about $250bn (£140bn) a year, but it is heavily underdeveloped. Over 94% of the market is made up of small, un-computerized family-run stores.