The 2016 Global Retail Development Index (GRDI) report released by A.T. Kearney highlights the top 30 developing countries for retail investment worldwide. This report is a key indicator as to which developing nations are experiencing prosperity and how they will fare in the future.
One of the surprises, which in retrospect is not that surprising, is the upsurge of India on this list. Last year India was number 15 and now it’s placed at number 2. China still holds the top position which is quite interesting considering its economy has been slowing down in the last few years. However, what’s even more interesting is India’s rise on this list. So how did India jump so high on the list, and will it stay there?
Let’s explore the primary reasons why India is enjoying its silver medal status.
Increased FDI – Every economist will most likely attribute much of India’s success to this reason, and they’re probably not wrong. It also shouldn’t come as a surprise that India claimed top spot for FDI in 2015. A combination of national development and a number of government initiatives over the last few years seem to be really paying off. Quite recently the Indian government allowed 100% foreign direct investment (FDI) in online retail of goods and services. This not only increased FDI but it also proved to be a great initiative to explore the tech and retail partnership. Projects such as Digital India, Make in India and Smart Cities are just some of the initiatives introduced by the Modi government to jump-start the economy.
Opening up the country – Indian government regulations are evolving to adapt to a global marketplace which in turn is generating wealth on an astounding level. The reduction in bureaucracy and red tape has also encouraged many international investors who were previously hesitant to invest in India. The country only recently opened its economy in 1991 which prompted a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment.
Consumerism – India is in the early stages of a consumer revolution. The middle class has started growing and will continue to do so for quite some time. It’s also currently one of the few countries in the world that boasts such a large youth/working population. According to The Hindu, “by 2020, India is set to become the world’s youngest country with 64% of its population in the working age group.” The disposable income and exposure these young Indians are having to the rest of the world has really pushed consumerism to such a mass level in India, with food and clothing industries taking centre stage.
As of now there are no signs to indicate any slowing down of the Indian economy. As a matter of fact, it’s quite the opposite. The next few years look to be even more promising as the government is making it easier to invest in the country.
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