Citing India’s rapidly expanding economy, relaxation of foreign direct investment (FDI) rules and a consumption boom as the key drivers, the 2017 Global Retail Development Index (GRDI), titled ‘The Age of Focus’, ranked India at top position among 30 developing countries on ease of doing business. India has surpassed China to secure the top position, as last year India was at second position behind China.
The management consulting firm A T Kearney’s index stated that India’s retail sector has been growing at an annual rate of 20 percent. Total sales surpassed the $1 trillion-mark last year and the sector is expected to double in size by 2020. Rapid urbanisation and a growing middle class with higher income levels are driving up consumption across the country. It also noted that the government’s continued support to relax FDI regulations in key areas of the retail sector have provided further boost to its growth.
As per the report, Indian government’s effort to boost cashless payments (witnessed in the recent nationwide demonetisation exercise) and reform indirect taxation with a nationwide goods and services tax (GST) are also expected to accelerate adoption of formal retail. It also stated that India’s top ranking is a clear vote of confidence in its retail market and vast growth potential.
GRDI, in its 16th edition, ranked the top 30 developing countries for retail investment worldwide and analysed 25 macroeconomic and retail-specific variables. GRDI ranked China in second place. Despite its slower overall economic growth, the market’s size and the continued evolution of retail still make China one of the most attractive markets for retail investment.
