India's retail market will grow to Rs.18.1 trillion ($395 billion) by 2010

by: IANS

India's retail market will grow to Rs.18.1 trillion ($395 billion) by 2010 as organised retail is expected to be 13 percent of the total market, according to a report.

'The organised retail market, which is expected to grow at 45 percent, will be worth Rs.230,000 crore (Rs.2.3 trillion) by 2012,' said the India Retail Report 2009, released by the New Delhi-based research group Images F&R Research.

'This will require investments in real estate alone of over $50 billion, much of which will be FDI spurring the balance of the trade,' it added.

'The consumer spending in India has increased by an impressive 75 percent in the last four years and will quadruple in the next 20 years, even when this quarter has seen some decline in spending on account of inflation,' the report added.

This will trigger the growth of this sector.

Food and grocery dominated the retail segment with 59.5 percent share valued at Rs.7.92 trillion, followed by clothing and accessories with a 9.9 percent share at Rs.1.31 trillion.

However, the report said the market for specialised retail, especially the luxury retail, will grow significantly in the next few years.

'Even when the metros and tier II cities will get the major share of organised retail, emerging cities like Chandigarh and Jaipur, which have a growing cosmopolitan population and high purchasing power, will emerge as new centres for the global luxury brands,' it added.

The report has contributions from over 100 think tanks in the retail industry.

'However, to enable this sector to realise its full potential FDI restrictions will have to be relaxed further and retail rentals will need to go some degree of rationalisation,' it added.

Commenting on the report, Commerce and Industry Minister Kamal Nath said: 'India retail model needs to go beyond the urban shopping malls and create an attractive retail environment where a large number of rural population can also find products and services.'