India’s organised retail sector situation is ‘emerging’, but regulatory constraints are, however, ‘still strong’, a PricewaterhouseCoopers’ retail and consumer survey studying the growth patterns in transitional economies has said.
“It still remains to be seen if the new government will be promoting modern commerce through a more liberal approach to foreign investment from companies in the retail and consumer sector—and also to changing the current limits on property rights,” points out the survey which otherwise has determined that India offers long-term potential for investment in the retail sector.
Fragmented market, channel conflicts due to disintermediation, limits to property rights are some of the challenges India’s retail sector continues to face, according to the survey.
While mergers and acquisitions, investment in the agri-food business, third party manufacturing are seen as ‘opportunities’.
“The Indian sub-continent has yet to resolve its infrastructure and business regulations in order to fire off a true wave of general economic development—other than its already highly successful information technology service sector,” notes the survey.
According to the survey, consumer goods companies have already established themselves with success in India and there is huge potential for future development as the country modernises.
“Currently, foreign retail and wholesale investment is restricted to cash & carry outlets and, to a lesser extent, e-commerce,” it adds.
“India’s outstanding capabilities in IT will ensure an extremely rapid and dynamic development in the modern retailing space,” the survey adds.
On the macro economic front, the new government appears to be adopting the same goals for economic and fiscal reform pursued by its predecessors and at the same time it is designing policies to help the 300 million of its people, which are among the poorest on the planet…these are encouraging signals for future economic growth and wider prosperity.
