The Indian economic turn around story is very much a story of its retail’s sector. The first one reflects the other like a mirror. From the quint essential Bombay Dyeing, Raymond and Vimal showrooms of the 1980s to the hyper malls, supermarkets of today, Indian consumer has turned the corner.

India’s retail sector makes up 10 percent of India’s GDP and is expected to be among the largest retail sectors in the world making it the fifth largest retail destinations in the world. Indian retail is punctuated with the rapidly growing online retail which is expected to surpass many markets out there clocking $200 billion by 2026.

Indian consumers are becoming consummate buyers. The growing affluence, rapid industrialization and the increasing influence of social media are contributing to the increasing appetite of the Indian consumer. The mobile phone and the convenience it brings to retail buying is one factor that has moved Indian retail story beyond its counterparts. India is the world’s third largest mobile market. Indian retail segment is characterized by the organised sector which makes 20 percent of the market and the rest held by the unorganised sectors. The Mom and Pop stores, the kirana stores, the local groceries are still going strong in the wake of giant discount stores and online players. However, the strain is telling. Either these stores will become an integrated part of the larger players by providing last mile connectivity for delivery or vanish altogether.

Indian retail story is still to be completed from a policy perspective. As of now 100 percent FDI is allowed only for single-branded retail chains. For all multi-branded chains, the FDI cap is at 51 percent. Even for the single branded chains there a number of strings attached such as a sourcing cap of 30 percent from domestic market. It takes a lot of effort for foreign brands to set up own chains in India. But the new regulations have definitely given a huge impetus to this sector. From sleeping products perspective, this means international brands can now enter India and source from local partners.