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Delhi delight With its government finally beginning to relax restrictions on foreign investment, international retailers are rushing to tap into India's vast retail market. Christian Metcalfe reports
With Teseo finally tying the knot with India's Tata group - after months of speculation - the scramble by international retailers to seduce the Indian market is gathering momentum.
CB Richard Ellis found in its recent Global emerging markets survey that among international retailers India is the most popular emerging market in the world, with 27% of those surveyed saying they had opened their first store in India in the past year, or were planning to do so soon.
"India today is the preferred destination when it comes to retail," says CBRE South Asia chairman and managing director Anshuman Magazine. "With a booming economy and rising spending capacity, more Indians are now looking for wider options in retail."
The country is considered particularly attractive because of the vast size of its market, estimated at $322bn. Remarkably, only 4% of this amount derives from organised retail; the remainder is held in a wide array of independent "mom and pop" independent stores. It is anticipated that India's retail market will rise to $700bn by 2012, with organised retail accounting for 20% of the market.
The Indian economy has grown by 8.6% pa in the past five years and now accounts for 4.6% of global GDP, making it the world's fourth largest. India's population has been increasing by 1.9% pa, while the number of higher-spending middle class people is forecast to rise to 583m (41% of the population) by 2025, up from just 50m (5%) today.
During the 1990s, while neighbouring countries were undergoing their own export-led model of economic growth, India was left behind - hamstrung by government restrictions on foreign investment that were only recently relaxed.
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