Economic Significance of Retail Industry in India

In the recent years, the retail sector in India is growing impressively and there are several reasons for the boom in this sector. Increased consumerism and increased purchasing power are the key factors for this. Economic development marked with increased production of wide range of products with multiplier effect created a favorable environment for the retail sector. Increased international and inter regional interactions makes people exposed to different cultures and way of life. Even domestically increased consumption and changed consumption pattern owning to diversity in culture, religion and the family values that encourage spending on specific occasions keeps the retail business activated. Indian retail sector is under developed in the sense that more than 94.0 per cent of the market is made up of small, indigenous styled family-run stores. Recently, there is an indication that Government is dropping it's traditionally protectionist's policy and opening up its retail market to greater foreign investment. In view of these changes taking place in the retail sector of India, it would be interesting to analyze their growth trend, opportunities and challenges in this paper. Such an attempt is made in this paper to analyze the evolution and present trend of retail sector in India.