India is the fifth-largest international retail market in the world and Indian retail industry is one of the most dynamic and fast-paced industries. With the introduction of several new players, the industry is seeing a drastic growth rate. Over 10% of India’s gross domestic product (GDP) and about 8% of employment are attributed to it. India ranked 73 in the United Nations Conference on Trade and Development’s Business-to-Consumer (B2C) E-commerce Index 2019. Today, India is the fifth-largest international retail destination in the world and is ranked 63 in the World Bank’s Doing Business 2020 report.

 Double Digit Spike – Growth of Retail in the Industry From FY 2022–23

 The sizable middle class and the largely untapped retail market in India have made it an attractive destination for international retail giants seeking to expand their businesses. This has helped the Indian retail business grow more quickly. Furthermore, the Indian government has been implementing various policy reforms to make it easier for foreign companies to do business in the country, which has made India a more attractive destination for foreign retailers.

 This year, the retailers across the country saw a modest growth. According to the survey done by Retailers Association of India (RAI), sales during the financial year April 2022 – March 2023 recorded a double-digit growth of 34% as compared to the sales levels in the previous year.

 If we see category-wise, the sports goods segment recorded the highest growth of 41% followed by 39% growth in QSR segment and 37% in the consumer durables & electronics segment. The growth was recorded across regions during the financial year with Eastern part of India signalling growth of 42%, Western part as 36% and Northern and Southern India experienced a growth of 32% and 27% respectively, for the financial year April 2022 – March 2023.

 Gradual Recovery Since COVID-19 Pandemic

 The COVID-19 pandemic had a significant impact on the retail industry worldwide, and India has not been immune to its effects. In 2020, the Indian retail sector experienced a steep decline in sales due to the pandemic and the consequent lockdown measures implemented by the government. The retail industry has since been gradually recovering and fighting various challenges like increasing footfall in brick-and-mortar stores, supply chain disruptions, and changing consumer behavior.

 The month of March 2021 marked the beginning of the new fiscal year for many retailers in India, and since then, the growth rates have varied based on the performance of individual companies. The financial year April 2022 – March 2023 has brought a new ray of hope. In order to support brick-and-mortar retail dealers with stronger infrastructure and credit, the government is also reportedly working on a national retail trade policy to bring synergy in the retail market.