India’s retail market is poised to more than double in the next eight years, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).

FICCI forecasts India’s retail industry will grow to US$1.3 trillion by 2020. With the current market size estimated at US$500 billion, this translates to an additional US$800 billion in the next eight years.

Traditional retail, which makes up 94 per cent of the Indian market, is expected to reach US$650 billion by 2020, growing at an annual rate of five per cent. But organised retail, which comprises just six per cent of the retail market now, is predicted to grow annually at around 25 per cent, reaching US$200 billion by 2020.

“Organised retail is expected to grow rapidly, further accelerated by the recent opening up of FDI. At the same time, the ‘unorganised’ sector will also see reasonable growth,” said FICCI secretary general Alwyn Didar Singh.

India, however, will only be able to reap the benefits if it works on addressing issues such as infrastructure development, streamlining legislation and urban development planning.

FICCI president RV Kanoria said investment of more than US$13 billion is required to build a strong backend infrastructure in India. FDI in retail would help in addressing the issue with compulsory investment of 50 per cent in the backend.

FDI in retail can also potentially add another 1.5 million jobs by 2016 where additional direct employment will rise by half million and additional indirect employment will increase by one million.

Nielsen’s latest survey showed that consumer confidence in India is the strongest globally, on par with Indonesia. This shows that people have trust on the growth phenomenon of economy and the industry needs to stand firm on maintaining this confidence, says FICCI.

GB