Deloitte: Cloudy outlook for India’s retail

The future of retail in India that is very bright as suggested by a

recent Boston Consulting Group (BCG) study. It had said that the country's organised retail is estimated at $28 billion with around 7 per cent penetration and is projected to become a $260 billion business over the next decade with around 21 per cent penetration. But as report by Deloitte Touche Tohmatsu and Stores Media suggest that outlook for India in the short term is a bit cloudy due to recent developments on the policy front. In the long term, FDI in multi-brand retail would have a positive impact on economic growth of India, and it would benefit the world’s leading retailers “as they continue to seek global opportunities beyond the Chinese market”, the report said.

Elaborating on the government rollback of the “planned liberalisation” in retail, it said, “It is not clear whether this proposal will be offered again.” In November, the Union Cabinet had decided to allow 51 per cent FDI in multi-brand retail, but later kept the decision on hold before a political consensus is reached on the matter.

In the long term, India’s prospects are good, according to Deloitte’s global report, which has ranked the top 250 retailers around the world according to their revenue. Wal-Mart continues to be the largest retail chain in the world. While stating that the country has a youthful population, the report points out that India has its share of obstacles. “These include a high degree of trade protection, continuing regulation of labour markets and uncertainty regarding the future of policy.”