The Indian grocery sector, valued at US$203 billion (£108.47 billion), is closed to foreign direct investment, but it is thought the government will change the law in the near future.
Global retailer Wal-Mart's first outlet is likely to be a hypermarket, but if the Indian government fails to lift the legal boundaries soon, the store group might instead establish a cash and carry business in the unrestricted wholesale business sector.
Both Carrefour and Tesco, the world's second and third largest grocers after Wal-Mart, are also thought to be interested in entering the market. However, IGD forecasts that Tesco is unlikely to enter India in the short-term, while it focuses instead on expansion in the US and China. Carrefour is concentrating on improving its existing portfolio at present.
IGD senior international business analyst Fiona McTavish said: 'Global retailers cannot afford to ignore India if they are looking for growth. There are a number of hurdles and challenges, but there is little doubt that India provides significant opportunities. The potential for growth is astounding.'
The Indian grocery market is the seventh largest in the world and poised to grow significantly in size across the next few years. By 2010, the market will be worth US$302 billion (£161.37 billion) and ranked fourth, above France, the UK and Germany.
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