Retail FDI may push GDP into double digits: Industry body

Retail sector FDI could help push India's real GDP in double digit growth trajectory over the next four years and generate around 10 million jobs in various agro and food processing industries like packaging, bottling, canning, containerising and transport segments, according to Salil Bhandari, president, PHD Chamber in a press release issued here yesterday.

It was evident that economic growth also entered the higher trajectory with the increased exposure to FDI as a percentage of GDP, according to Bhandari.

It was evident that economic growth also entered the higher trajectory with the increased exposure to FDI as a percentage of GDP, according to Bhandari.

He said during 1997-2001, FDI contributed 0.77 per cent to GDP and the growth of real GDP in the period was 5.95 per cent. However, the increase in FDI contribution to GDP to 1.06 per cent in 2002-20006, boosted real GDP growth from 5.95 per cent to 7.02 per cent, he said.

Domestic 'kirana' stores and retail chains would function hand in hand and cater to the diverse consumer segments, and in fact, neither of them, on their own would be able to cater to the total demand given the diverse profile of the Indian consumer base.

Since about 70 per cent of the Indian consumers dwelt in the rural areas, modern retail chains would only be able to cater to about 30 per cent of the consumers as FDI in retail had been opened up only in urban areas with population of more than 10 lakh (as per 2011 census).

Bhandari also pointed out that both retail formats would therefore co-exist and meet the demands of their consumers.