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Market share of organised retail to rise to 10 pc by 2020: Report

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Rating agency expects the market share of in India to rise to 10 per cent by the financial year 2020, compared with 7 per cent last fiscal.

Market share of organised retail to rise to 10 pc by 2020: Report
The cabinet's approval of 100 per cent FDI in single-brand retail via automatic route has been seen as a progressive step by many in the industry, a move which will help attract a lot of foreign investment and also enhance ease of doing business in the country

This will be supported by the Government’s decision to permit 100 per cent foreign direct investment (FDI) in single-brand retail under the automatic route from 49 per cent earlier, relaxation in sourcing norms, and healthy growth prospects for organised retail, it said in a statement

Before the change in rules, CRISIL had expected the market share of organised retailers to grow to 9 per cent by fiscal 2020, based on healthy revenue growth of 18 per cent of organised brick-and-mortar retailers.

The cabinet’s approval of 100 per cent FDI in single-brand retail via automatic route has been seen as a progressive step by many in the industry, a move which will help attract a lot of foreign investment and also enhance ease of doing business in the country.

Under the new guideline, it has also been decided to permit the single-brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning April 01 of the year of the opening of the first store against the mandatory sourcing requirement of 30 per cent of purchases from India.

A better operating environment for single-brand retail would also mean the pace of store additions by organised retailers will be faster than the annual 10-12 per cent, CRISIL had forecasted earlier.