Organised retail sector to triple to $17 bln by 2011

New Delhi, Jul 11 (UNI) The organised retail sector in India will grow faster than the unorganised sector to tripple its market share to 17 billion dollars in the next four-five years, from the current level of 6 billion dollars, a study said today.

The overall retail sector is expected to grow at 7 per cent by 2010-11 to enlarge its market share to 280 billion dollars, from its present estimated level of 200 billion dollars, according to the analysis carried out by Associated Chambers of Commerce and Industry (ASSOCHAM), on 'Future of Retail Industry in India'.

Cities and metropolies in which retailing will show booming prospects include Mumbai, Delhi, Chennai, Kolkata, Bangalore and Kanpur, said ASSOCHAM President Anil K Agarwal, adding that the popular mode adopted for building shopping malls in these cities will be based on the build, operate, lease and sell basis.

This system will lead to establishments of closer linkages and relationship between real estate developers, state governments, financial institutions and retail industry.

As per the industry chamber's estimates, investment opportunities that the retail sector will create in the next 4-5 years will result in continued urbanisation and increase in the per capita income of Indian populace, which will finally lead to greater consumerism.

The growth of the retail sector will lead to a greater shift towards service economy, in which need for real estate will be paramount, said Mr Agarwal.

Franchising in retailing will emerge as a popular mode of retailing as there will be proliferation of availability of brands with both foreign and Indian companies acquiring a strong brand equity for their products in the near future.

The retail boom currently being witnessed in India is likely to have a significant impact on the commercial real estate sector as the large metropolies will have sizable retail construction projects underway.

However, there are a few stumbling blocks that may restrict the growth of the sector, and these include very high stamp duties on transfer of property which vary from state to state.

The study suggested that the government should encourage People of Indian Origin (PIO) to invest in real estate and township building and foreign investment in real estate business.

On the domestic taxation front, sales tax rates differ across the various states making supply chain management a challenging task for organised retailers. If retailing has to grow, then corrective measures should be initiated for correcting the aforesaid anomalies to lure investment in Indian retailing, it noted.

UNI CS RA HT1705