The Indian government is in the final stages of a comprehensive policy overhaul to revamp its retail trade, bringing fresh hope to the industry. The long-awaited nationwide retail policy aims to facilitate smoother business operations by providing easier access to finance and infrastructure.A top government authority has stated that once the policy rollout is complete, it will establish a globally competitive and sustainable ecosystem in which the retail trade can flourish. As part of the implementation, insurance coverage against accidents will be provided to all retail traders.The draft policy was initially released in December 2021 amid the backdrop of a raging pandemic that severely disrupted retail supply chains across the country. There is no definite timeline on when exactly the fresh policy will be introduced.Retail has been one of the engines driving the Indian economy, accounting for nearly 15 per cent of the country’s GDP in a population of 1.4 billion people. An analysis by the Boston Consulting Group shows that India’s retail sector is projected to reach a value of US$2 trillion by 2032.The sector is now worth about US$850 billion, with unorganised entities contributing over 85 per cent.Kirana stores, the neighbourhood convenience shops, are a distinctive feature of India’s retail landscape. These small-scale retailers are deeply embedded in local communities, offering personalised service, credit facilities, and familiarity with consumers’ preferences.Employing over 50 million people directly, the retail sector is the second largest source of livelihood in India after farming. Over the past decade, the retail sector has consistently achieved a CAGR above 10 per cent.Sanjiv Singh, Joint Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), recently stated, “This strategy [policy overhaul] will assist traders in obtaining additional loans and improved infrastructure. In addition to this, the department is also planning to develop an e-commerce policy for online shops.”DPIIT, the government body spearheading the policy overhaul, has circulated the draft to more than a dozen government departments to seek feedback.“This will also help provide improved infrastructure facilities and easy loans for small retail dealers on the street,” Singh added.India’s retail prowessIndia, the fifth-largest global destination for retail space, is poised for significant retail growth in the coming years and has been closely monitored by global players. For instance, about 2.16 million square metres of retail space, equivalent to around 60 shopping malls, is set to become operational within the next two years alone.Major retail segments in India include apparel, household appliances, mobile phones, jewellery, wearables, footwear, health and beauty products, pharmaceutical products, consumer durables, furnishings, food, grocery, books, gifts and entertainment. Food and grocery hold the largest market share, followed by jewellery.Increasing purchasing power among Indian consumers, a rising middle class, and a growing population of young people are driving the sector’s growth. Between 2000 and 2022, global retail giants poured more than US$4.29 billion into Indian retail as foreign direct investment (FDI) – and this figure is expected to increase rapidly.The steady penetration of high-speed internet, even in quasi-urban and rural regions, has also been a boon for the industry. Organised retail players have capitalised on these flourishing opportunities by offering a wide range of products and services, cutting-edge technologies, and customised user experiences.Many retailers in India are adopting hybrid models, combining online and offline channels to provide an omnichannel shopping experience.Large retail chains, supermarkets and malls have emerged in urban centres, offering modern shopping experiences and a wide range of branded products.Establishing a ‘Retail Ministry’An idea to establish a ‘Retail Ministry’ has been proposed to streamline labour laws, FDI investment and grievance redressal, creating a ‘single-window’ structure. Presently, the Indian retail sector is dominated by unorganised units and is highly fragmented.In the absence of a federal-level policy, pan-Indian and global retailers face the challenge of navigating a multitude of state-level laws and implementation hurdles.For instance, while federal law allows retail stores to remain open 24 hours a day, state-level regulations may prohibit it. The introduction of a pan-India policy would eliminate these disparities and reduce the compliance burden.Multiple industry reports highlight the need to enhance infrastructure facilities such as warehouses and cold storage, which would generate hundreds of thousands of new jobs in the retail sector.The Confederation of All India Traders (CAIT), an influential umbrella organisation representing over 70 million traders, has cautioned that the upcoming policy should comprehensively address the needs of players of all sizes, including corporate retail, non-corporate retail, e-commerce, and direct selling.