Quo Vadis India ?

The Parliament and the whole nation is perplexed over FDI in Retail.

FDI has become more varied in recent years and cash inflows have shifted from natural resources, infra and export driven manufacturing to different areas like Tourism, Retaill, construction and off shore services.

FDI to twenty developing economies amounted to USD 45 billion in the retail sector. Significant FDI was received by Brazil, Poland and Thailand in the Retail sector.

In this field, India has been slower. Organised retailing has grown from 10 to 40 percent in Brazil and 20% in China, while in India it is only 2%, in the last decade.

For the global retail chains, India with its huge market amounting to one trillion dollars in retail, is an important destination. The Indian retail landscape is changing, with the rise of the middle class ( 500 million ). The upper and the lower middle class now prefer to buy branded goods from standard showrooms and there are going to 1,50,000 such super market stores in India within 15 years ! The smaller cities are emulating the metros and Retailing has been hailed as one of the surise industries !

"India is the second most attractive retail designation globally, among thirty emergent markets" says A. T. Kearney, awell knownInternational Management Consultant

Unorganised retailing constitute 98% of all retailing trade. Now big domestic players like Reliance have entered the field and is expanding in a big way.

WalMart is partnering Bharti and Carrefour is going to partner Landmark.

Why are the global retailers interested in India ?

Strategic Location and Geography

Enjoying unique geographical advantage, India is strategically located in Asia will links to all markets. Lord Curzon said " Whoever masters India will become the master of Asia and of the whole world". Lord Curzon celebrated India's importance in the Empire and called her the Jewel in the Crown. Total Area 3287 K sq km and 7000 km of Coastline.

Versatile Demographics

With a population of more than 1.2 billion and diverse cultures, India is a land of all seasons. A versatile population of rural and urbal markets. 700 million rural and 500 million urban. The foreign retailers want a slice of the big pie !

Vast growing economy

With a GDP growth hovering around 8-9%, India is rising along with China. Forex reserves more than 300 billion. With a rapidly growing infrastructure, India has all the ingredients of a rising economic super power and is tipped to be the third largest economy by 2050 by GS. ( PWC Report says by 2012, India will surpass Japan and become the third by GDP PPP ).

To become the third largest economy

India will become the third largest economy by 2050, according to Goldman Sachs. Here are the projected GDP figures.

Forecast of GDP ($ Trillion)

Country 2010 2050

China 3.0 44.5
U.S.A 13.3 35.2
India 0.9 27.8
Japan 4. 6 6.7
Brazil .7 6.1
Russia 0.8 5.9
U.K. 1.9 3.8
Germany 2.2 3.6
Italy 1.3 2.1

Astrologically the present turbulent phase caused by adverse Jupiter and Saturn will pave the way for a brighter 2012, after May, when Jupiter moves over to Taurus. In the 11th Jupiter will be benign and the effects of globalisation will be felt in a positive way. India is sure to overtake Japan as the third economic power by 2012 !