NRIs in UAE: Is opening a grocery store in India a good idea?

Question: I have been working for a supermarket in the Gulf for the past seventeen years and I am planning to return to India to start my own outfit in the retail trade. I am worried about the competition from online platforms as well as from smaller retail stores. I need some information on the impact they are making on the retail trade in India.

ANSWER: Initially, quick commerce platforms started off as a top-up service for last minute purchases of groceries and small ticket items.  However, these platforms have emerged as the fastest growing sales channel, even in the space of premium portfolios. In the past, just one-third of shoppers in the metros resorted to online platforms for their daily shopping.  At present, 87 per cent of shoppers use the quick commerce platforms as they provide convenience and instant delivery. This is despite the fact that these platforms offer discounts of just 6-9 per cent, whereas supermarkets give more attractive discounts of 13-18 per cent.

According to market analysts, the quick commerce grocery market is likely to grow threefold by 2027 with an estimated turnover of Rs.1.7 trillion.  Their reach is likely to extend to all towns with a population of half a million or more. It must also be mentioned that India has 13 million kirana stores which are able to hold their own despite the growth of quick commerce platforms. Leading FMCG companies are going out of their way to improve trade relationships with small retailers by supplying more premium products and offering them higher margins. These large multinational companies have reconfigured their supply chain and distribution infrastructure for promoting general trade and creating value offers with merchandising support.

Question: Cyber attacks are becoming common these days.  Is India geared up to meet this threat?

ANSWER: All efforts are being made in India to meet the serious challenges posed by cyber threats. Generative AI is being used to help create stronger and swifter counter measures which will make the internet safer to use. While companies create tools to tackle cyber threats, it is equally important for users of the internet to take effective measures to identify malicious and fraudulent content. Unlike the physical world where people use their instincts to identify something which is dangerous, the online world does not have a parallel.

State-sponsored cyber threats are also increasing as Governments possess capabilities which cannot be matched by private players. The Indian Government is taking all steps to provide cyber security as it has partnered with well-known international companies to build a strong workforce which is well trained and skilled. The recent increase in geopolitical tensions has made the Indian Government take strong and measured steps to counter this threat.

H. P. Ranina is a practising lawyer, specialising in corporate and tax laws of India.

Question: Creation of additional jobs and boosting exports are the two objectives of the Indian Government.  Have these objectives been achieved while having a 6.4 per cent growth rate in GDP?

ANSWER: An average growth rate of 6.4 per cent during the past three years has helped small and medium enterprises to effectively boost the industrial sector and push exports to a higher level than was anticipated. This export oriented growth spearheaded by the MSMEs has ensured that Indian industry has entered the global supply chain which has recently been weakened by geopolitical factors. This has been galvanised by the 14 production-linked incentive (PLI) schemes which so far have attracted investments of Rs.1.76 trillion and created more than 1.2 million jobs. The cumulative incentive amount under the PLI scheme disbursed so far stands at Rs.215.34 billion.

The schemes cover large scale electronics manufacturing, IT hardware, medical devices, pharmaceuticals, telecom and networking products, food processing, speciality steel, automobiles and auto components, drones and drone components. The PLI scheme for food products has generated sales of Rs.3.8 trillion. Companies which are involved in food processing have given a boost to raw material procurement, benefiting under-developed and rural areas, while supporting farmers’ income. Therefore, while the GDP growth rate has been sustained at an impressive rate of 6.4 per cent, the main benefit to the Indian economy has been in terms of higher growth in exports and creation of new jobs.

The writer is is a practising lawyer, specializing in corporate and fiscal laws of India.