The retail outlets most of which are in showroom category in India are estimated around 15 million as of now, the number of which would further multiply. Out of 15 million retail outlets, nearly 5.5 million sell food and retail products.
The rural retail which would be in unorganized sector even by 2010, its size would touch about US$ 45 billion and in 2015, the projections and estimates are made for US$ 65 billion. In 2007, rural retail size has been estimated at US$ 30 billion which by 2008, is expected to be around US$ 36 billion. As per ASSOCHAM estimates in 2008, 150 new malls are likely to be added that would capture larger organized retail market size.
As regards to real estate sector, the market size is currently estimated at US$ 15 billion which has been growing between 35-38% in the last couple of years as a result of which huge investments have poured into it.
From 2008 onwards, the real estate sector is likely to grow between 40-45% but witness a slow down in metros and large cities by 2010.
As a result of this, the reality sector in tier II and tier III and even tier IV cities would make major expansion drive for providing dwelling units to neglected lot of society.
Mr. Dhoot also said that an estimated US$ 10 billion is expected to flow into the domestic reality sector by end of 2008.
India's FDI's in retail sector account for 22% of its total FDI's inflow which is because in India, return on real estate investments are around 22% as against 5-6% of world's developed market.
Currently, 100 world's lead players in real estate have already found a footholding in Indian reality sector. The increased flow of funds has resulted in various policy measures to check the guess of speculative money.
About 94% of capital investment being made in the sector is in tier I cities of Mumbai, Delhi and Bangalore. As the property in metros has become costly and money got dearer, the developers are moving towards tier II and tier III cities.
The reality sector is likely to notch US$ 90 billion by 2015. The demand for both commercial and residential property is outstripping supply. Home loans formed 11% of total outstanding credit of scheduled commercial banks in March 2005, up from just 2.4% in March 1990.
The sales value of housing construction has witnessed an exceptional leap from Rs.17.61 crore in 1991 to Rs.4,182.67 crore in the year 2006. Housing loans grew at an average rate of 47.68% during 2000-01 to 2004-05, subsequently slowing down to an average of 27.85% IN 2005-06 and 2006-07.
The Associated Chambers of Commerce and Industry of India
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