INDIAN RETAIL MARKET

The retail sector in the nation of 1.2 billion people is

estimated to have annual sales of $470 billion, with nearly 90% of the market controlled by tiny family-run shops. The Retail sector accounts for ~15% of Indias GDP and is projected to grow to US $675 bn by 2016, @CAGR of 7.5%. The Organised retail market is estimated at US $28 bn and accounts for ~10% of the overall retail market. The Organised retail market is projected to grow to US $84 Bn by 2016, @CAGR of 26%.

India Retail Market (Overall) : By Category

With an estimated market of US$ 325 bn, the Food & Grocery segment is the single largest retail category and accounts for ~70% of the total retail market in 2011. The organized retail segment for Food & Grocery is estimated at ~US$ 9 bn and accounts for 35% of all organized retail

Category Food and Grocery Apparel Jewellery & Watches Consumer Electronics & IT Pharmacy Furnishings & Furniture Restaurants and Food Joints Footwear Beauty Services Health/Fitness Services Others Total (US$ Bn)

2006 217 25 16.5 16.5 8 6.5 4.6 3.6 0.6 0.4 11 310

2011 325 35 25.6 22.7 13.9 9.1 8.8 4.5 1.3 1 23 470

2016 CAGR (2011-16) 425 5.50% 50.2 7.50% 44.2 11.50% 42.8 13.50% 23.4 11% 17.1 13.50% 15.8 12.50% 8.3 13% 3 18% 2.5 20% 42 13.10% 675 7.50%

India Organised Retail Market (Overall) : By Category

At 35%, Food & Grocery has the highest share of organized retail . Food & Grocery along with Apparel, Jewellery & Watches and Consumer Electronics & IT accounts for ~80% of the organized retail market in India in 2011.

Category Food and Grocery Apparel Jewellery & Watches Consumer Electronics & IT Pharmacy Furnishings & Furniture Restaurants and Food Joints Footwear Beauty Services Health/Fitness Services Total (US$ Bn)

2006 2 3.5 1 1.5 0.2 0.4 0.5 1 0.2 0.1 10

2011 9 5.5 2.5 4 0.8 0.7 1.5 1.7 0.2 0.2 26

2016 CAGR (2011-16) 34 30.00% 8 8.50% 7.5 25.00% 18 35.00% 4.5 41% 1.2 12.00% 6 30.00% 3.8 18% 0.5 20% 0.6 25% 84 26.00%

Government Initiatives in Indian Retail Sector

Foreign direct investment (FDI) up to 100 per cent is allowed

under the automatic route in cash & carry (wholesale). Government is planning to remove the old tax systems to simplify the tax calculation and avoid double taxation in Indian retail. New Goods and Service Tax (GST) will simplify the tax structure. The Cabinet finally paved way for the entry of global retail giants such as Wal-Mart, Tesco and Carrefour to open independent multi-brand retail outlets in India. The Cabinet has allowed foreign direct investment (FDI) of up to 51 per cent in multi-brand retail. Simultaneously, the Cabinet also gave the nod for raising the FDI limit in single-brand retail ventures to 100 per cent