A vegetable seller waits for customers at a market in the western Indian city of Ahmedabad. File/ Reuters
After facing a series of lockdowns and disruptions in consumption due to the Covid-19 pandemic, India’s retail industry seems to be back on track with consumption crossing or about to reach pre-pandemic levels across regions.
The share of organised retail in the Indian retail industry has comparatively increased in the past few years and is expected to grow even further in the coming years, according to Knight Frank India survey.
In March 2022, all categories except accessories, had already surpassed pre Covid-19 level sales.
Over the last four years, electronics outperformed in terms of sales growth even during Covid-19 hit periods, primarily driven by the WFH trend and consumers opting for premium products.
The food & beverage (F&B), apparel and department stores categories show healthy recovery after the third wave as consumers get back to the ‘old normal’ way of shopping.
The growth in consumption across regions and categories as normalcy returns is a huge relief for retailers and will help them to meet their contractual obligations with mall operators eventually.
The Covid-19 pandemic caused most industries to buckle under the threat of an economic slowdown and India’s retail sector story was no different. Despite the adverse impact of Covid-19 on FY 2021, India’s organised retail sales are expected to grow manifold in the next six years.
With economic growth, organised retail sales will also witness tremendous growth and move up the growth curve at a CAGR of 17 per cent during the FY 2022-28 period. Evolving consumer spending patterns and increasing disposable income levels are redefining India’s retail landscape.
The retail industry will continue to account for 10 per cent of India’s GDP for the next five financial years.
The share of organised retail sales is derived from the size of the retail industry.
These assumptions and variables were further verified with multiple retail industry experts.
The organised retail sales grew at a CAGR of 24 per cent between FY 2017- 22. Growth drivers such as healthy economic growth, improved retailer confidence, sentiments towards mall development, and increasing disposable income of Indian consumers are expected to accelerate the volume to further heights in FY2023.
However, the threat of restrictions from Covid-19 waves and geopolitical tensions may continue to persist in FY2023.
Organised retail sales volume is estimated to grow at a CAGR of 17 per cent, from $52 billion in FY2022 to $136 billion by FY2028.
Shopping malls were at the receiving end of a major setback due to the sudden closure during Covid-19 lockdowns.
Potential consumption in malls across the top 8 cities is estimated to grow at a CAGR of 29 per cent in the FY 2022-28 period reaching $39 billion by FY 2028.
This high growth of revenue in shopping malls is largely projected due to increasing mall supply in the next six years coupled with the sustenance of rising consumption demand.
Entry of new brands in the market, changing demographic profiles and evolving consumer tastes and preferences are expected to sustain this growth in consumption.
The long-term outlook of the mall business in India continues to remain promising for the next few years.
I am in the Gulf for 10 years and would like to invest in immovable property with my brother who is in India. Can he invest in the property acquisition? Selvyn, Sharjah
Yes. Under the Liberalised Remittance Scheme, your brother can invest overseas upto $250,000 per financial year. It can be used for varied purposes including investment in property.
However, please note that clubbing is not permitted for capital account transactions such as purchase of property if your brother is not co-owner of the property.
We are in the process of selling our deceased father’s property in India with three legal heirs there and I am located in the Gulf. Is a power of attorney sufficient to resolve the situation? Sharan Gouda, Dubai.
Yes. You will have to get attestation of the specific power of attorney in the Gulf with the Indian consulate. You may grant PoA to any of the three legal heirs in India for the purpose of executing and registration of sale deed. Once it is received in India, it has to be stamped and signed with the appropriate stamp duty.