‘FDI can scale modern retail to Rs 3.5 tn’

The domestic retail market currently is estimated to be Rs 21.6 lakh crore and by 2015 it is likely to touch Rs 37 lakh crore,Crisil added.

The government is in the process of allowing 51 per cent FDI in multi-brand modern retail,though a consensus is yet to be reached.

“Today there is moderate competition; we feel there will be increased competition very soon. Once foreign players enter,the competitive landscape is expected to change,” Crisil Head for Industry Research Ajay D’Souza said.

Crisil envisages the competition to be higher in metros during the next five years as it expects hypermarkets to open more stores in these areas initially.

“In future,we see expansions in the hypermarket formats. In case of specialty stores,action will be focused in apparel,footwear,jewellery and to a lesser extent consumer durables. The competitive landscape is going to be much higher in cities.

In terms of the metros and mini-metros,if we look at the seven large cities (Mumbai,Delhi,Kolkata,Chennai,Bangalore,Hyderabad and Pune),we believe the organised retail penetration is going to grow the fastest in the next five years.

“We expect organised retail penetration in these cities to be close to 33 per cent by 2015 from the current 28 per cent in FY11. In tier-1 and tier-2 cities it won’t be that large relative to these seven large cities,” D’Souza added.