The year 2006 marked the beginning of the ‘retail revolution’ through the entry of big names like Reliance with the announcement of large investments. But what really caught the eye was the Bharti Group’s announcement of its alliance with the world’s largest retailer, Wal-Mart. Local companies and local and foreign joint ventures are expected to position themselves in a better position than purely foreign ones in India’s nascent organized retail industry.

India has topped AT Kearney’s annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. The Indian retail market, one of India’s fastest growing industries, is expected to grow from USD 350 billion to USD 427 billion in 2010. According to Euromonitor International, the Indian retail market will grow in value terms by a total of of 39.6 percent between 2006 and 2011, with an average growth of almost 7 percent per year.

India’s first true shopping mall, complete with food courts, recreational facilities, and a large car parking space, opened in 1999 in Mumbai. (this mall is called “Crossroads”). The clues are very encouraging. The first steps towards sophisticated retail are being taken, and “Crossroads” is the best example of this awakening. More such malls have been planned in the other big cities of India. According to an FDI Confidence Index survey conducted by AT Kearney, the retail industry is one of the most attractive sectors for FDI (Foreign Direct Investment) in India and foreign retail chains would have a big impact.

Food Retail and Mobile Retail is growing at a high rate. Reliance Retail, a subsidiary of Mumbai-based Reliance Industries, has opened around 100 fruit and vegetable shops under the brand name “Reliance Fresh” in less than a year, already investing around Rs: 2500 crores! US$0.637 billion!) and has plans to invest around Rs: 90,000 crores ($22.99 billion) in setting up retail stores in various formats: hypermarkets, supermarkets, specialty stores, discount stores, etc. Also Bharti Wal-Mart is preparing to enter this sector soon. So look out for more multi-billion dollar investments in this sector in the coming year 2008.

Rural retail trade also gained momentum with Godrej going from strength to strength through his Adhaar initiative. Clearly, with 70 percent of the population of 1.095 million people in rural areas, made up mostly of farmers, retailers have realized that this is the fastest way forward, be it ITC’s e-Choupal initiative or DCM Consolidated’s Hariyali stores. Reliance’s retail company is also targeting this segment and plans to spend a lot of money building the market. India will continue to be the most attractive retail market for global investors.