The Indian retail industry, which comprises of both the organized and unorganized sector, is currently estimated at about US$ 490 billion. Favorable demographics, increasing urbanization, nuclear families, increased purchasing power of consumers, preference for branded products and improved lifestyles are some factors which are driving the Indian Retail Industry. India's retail industry is expected to touch Rs 47 trillion (US$ 782.23 billion) by 2016-17, expanding at a compounded annual growth rate (CAGR) of 15 per cent, according to a study.
The total organized retail supply in 2013 stood at approximately 4.7 million square feet (sq ft), witnessing a strong year-on-year growth of about 78 per cent over the total mall supply of 2.5 million sq ft in 2012. The foreign direct investment (FDI) inflows in single-brand retail trading during the period April 2000-January 2014 stood at US$ 98.66 million, as per data released by Department of Industrial Policy and Promotion (DIPP).
India's online retail industry has grown at a swift pace in the last five years from around Rs 15 billion (US$ 249.64 million) revenues in 2007-08 to Rs 139 billion (US$ 2.31 billion) in 2012-13, resulting into a CAGR of over 56 per cent. The online retail business in India is expected to grow at a whopping 50-55 per cent annually to become a Rs 50,000 crore (US$ 8.32 billion) business in the next three years. The Government of India has allowed 51 per cent FDI in Multi-Brand Retail Trading (MBRT) and 100 per cent in Single-Brand Retail Trading (SBRT). Hence in the coming years, retail industry is expected to grow 50-60 per cent annually in tier II and tier III cities, compared to only around 30 per cent in the metros.