Wal-Mart to Be First in India: Report

WATFORD, England -- International food and grocery research firm IGD here has forecast in a report that Wal-Mart will be the first global retailer to enter the Indian food and grocery retail market. Although the Indian retail sector, which is worth U.S. $203 billion according to the firm, is now closed to foreign direct investment, the government could allow international retailers to enter the market in the next year.

If that occurs, IGD believes that Wal-Mart will be the first to make overtures, with its supercenter format. If the government hesitates, Wal-Mart will probably get a leg up on its competitors by launching a cash-and-carry business in the unrestricted wholesale sector. Tesco probably won't enter India in near future as it focuses on other crucial markets such as the United States and China, and Carrefour is currently concentrating on maximizing the performance of its existing operations.

"Global retailers cannot afford to ignore India if they are looking for growth," noted IGD's senior international business analyst, Fiona McTavish, in a statement. "By 2010, it will have overtaken France, Germany, and the U.K. in the league of global grocery markets, and will double to a value of US $482 billion by 2020."

Added McTavish: "The prospect of India opening its doors to foreign direct investment means that the time is ripe for international retailers and suppliers to start planning entry and expansion strategies. There are a number of hurdles and challenges, but there is little doubt that India provides significant opportunities. The potential for growth is astounding."
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