We have had a good 2015. The Indian economy is in the right direction. GDP growth is on track at 7.4 percent for the second quarter of FY16; commodity prices worldwide witnessed a downslide, strongly benefiting a consuming country like India. This has resulted in benign inflation, giving the Reserve Bank of India (RBI) adequate elbow room to cut interest rates. These positive trends have relieved some of the pressures we faced during the last couple of years. There is a positive sentiment in the economy, and breathing space for the Indian businesses and consumers from rising costs of doing business or running a household. Consumers are in the mood to shop as the economic outlook is looking positive and they benefit from the pickup in salaries and jobs.
As 2016 arrives, there is a mood of optimism and the world is once again looking at India with renewed interest. We are a country of over a billion people and a large untapped market, offering immense potential. With a median age of 26 years, this large young population has better earning opportunities than their predecessors and is predisposed to consume. They want to own the best of brands and are willing to spend. Social media, cinema and TV are acting as catalysts to drive the aspirations of these young Indians. This represents a large canvas of opportunity for the under-penetrated modern retail industry in India.
For the retail industry in India to thrive, there are four critical components that need to come together. These include a vibrant economy that supports consumption, rapid development of retail infrastructure, easy mobility of goods within the country and an unambiguous, fair and transparent policy regime.
(This story appears in the 22 January, 2016 issue of Forbes India. To visit our Archives, click here.)