India has topped AT Kearney’s annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment.

The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates is estimated to grow from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, organised retail which presently accounts for 4 per cent of the total market is likely to increase its share to 22 per cent by 2010.

India has one of the largest number of retail outlets in the world. Of the 12 million retail outlets present in the country, nearly 5 million sell food and related products. However, organised retail accounts for only 4 per cent of the total market, offering huge growth potential in this segment.

According to a report by Images Retail the number of operational malls to more than double to over 412 with 205 million square feet by 2010 and further 715 malls by 2015 on the back of major retail developments even in tier II and tier III cities in India.

With consumers for luxury goods being larger in number than the adult population of several countries, the Indian luxury retail market is estimated to leap-frog from around US$ 3.5 billion now to US$ 30-billion by 2015, says a survey done by AT Kearney. India’s luxury market, estimated to be the 12th largest in the world, has been growing at the rate of 25 per cent per annum.

Already, Indians splurge US$ 2.9 billion on luxury assets, spend another US$ 953 million on luxury services and top it by buying luxury goods worth US$ 377 million. And with a rapidly expanding population of high net worth individuals, India could emerge as the next hub for luxury goods consumption.

Consequently, a number of foreign brands including French Connection, Sanrio of Hello Kitty fame, Jimmy Choo, La Pearla and Calvin Klein among others have already lined up for permission to infuse foreign direct investment through the single-brand retail window.

Leading the kids retail revolution is the apparel business, which accounts for almost 80 per cent of the revenue, with kids’ clothing in India following international fashion trends. According to research firm KSA Technopak, the branded segment comprises US$ 701.7 million of the total kids’ apparel market of over US$ 3 billion. Industry experts say kids’ retailing will touch annual growth of 30-35 per cent.

Led by the rising purchasing power, changing consumption patterns, increased access to information and communication technology and improving infrastructure, the rural retail market is estimated to cross the US$ 45.32-billion mark by 2010 and US$ 60.43 billion by 2015, says a study by CII and YES BANK.

Consequently, Corporate India is already firming up concrete plans to tap the US$ 100 billion-dollar rural retail market, which is growing at double the rate of urban markets, with innovative schemes and human resource policies. And with 87 per cent of rural markets not having access to any sort of organised marketing and distribution, this segment has tremendous potential for growth.

India’s huge domestic market, along with export potential and policy reforms has attracted a large number of corporates into the agricultural retail segment.

The Government allows 100 per cent foreign direct investment (FDI) in cash and carry through the automatic route and 51 per cent in single brand outlets. Besides, the franchise route is available for big operators. Further, the Government plans to open FDI into retail after convincing its stakeholders (such as small shop owners) that they are not at threat from large players.