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Challenges of retailing in India (Inglês)

The retail and wholesale sector in India is one of the largest sectors, contributing 14 percent to the national Gross Domestic Product (GDP) and 10 percent to formal employment. The sector has also shown strong growth in recent years, with a compounded annual growth rate of over 8 percent during 2000-2006 (at constant prices) compared with 7 percent for the national GDP. This note uses enterprise surveys' data on 1,948 retail stores in 41 large cities of India to highlight key problems and policy issues. This note highlights the key obstacles and problems faced by Indian retailers and how the severity of the obstacles varies across rich and poor states and small and large stores. Inadequate power supply, poor access to finance, and high corruption are the three most pressing problems. The note also sheds light on the low level of competition in the sector and its consequences for the efficiency of retail stores.

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