Organized Retailing in India: Issues and Outlook

Domestic and multinational corporations have begun to enter retailing in India, raising concerns that they will destroy the millions of small stores and street vendor businesses that presently dominate retailing in the country. Policymakers know that corporate retailers can improve the efficiency and productivity of retailing and distribution in India, but they are also concerned about possible harm to small businesses and loss of jobs among those who might not have the skills and training needed to find alternative employment. We examine whether corporate retailing has already harmed small retail businesses in India (and to what extent if so) and how much damage might occur in the future. We discuss how corporate retailing might benefit small retailers and consumers and consider how small and large retailers might coexist in a country where, in the next twenty years, 40% of the population and 70% of gross domestic product may be concentrated in urban areas. We consider problems that may arise if organized retailing grows and suggest ways in which such problems could be addressed by policymakers.