The new law approved by New Delhi, which will allow foreign direct investment of up to 51% in multi-brand distribution, will radically change the multi-brand retail sector in India and promises to give a further boost to the Indian economy.
According to a very recent research conducted by CRISIL, thanks to this opening local retail will be able to attract investments equal to 2.5-3 billion USD in the next five years, experience a growth of 20% and create around 10 million jobs, of which 4 direct and 6 indirect. The modernization of the sector will also give more choice to the consumer, who will be able to count on a wider range of higher quality products.
The most interesting opportunities, which are taking shape in various sectors, will particularly concern food, clothing, luxury and electronics.
The reform will act as a powerful catalyst for the growth of the unorganized market, which currently has a share of only 4% in the retail sector, compared to 96% in the unorganized market. Through the new law, organized distribution could reach 15-20% percent within five years.
Great opportunities are foreseen for international retailers: India is the largest remaining frontier in the retail sector (in China it is already starting to become saturated) and for years the sector has already ranked among the most important and among those with the highest potential growth.
For a complete overview of retail in India click here
Manlio Urbano – India multi-brand retail law
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