India’s offline retail market was estimated at $860 billion in 2022; it is expected to nearly double by the end of the current decade. Online retail, on the other hand, is a $70-billion market and is expected to grow at a rapid pace, according to a 2023 report by consulting firm Deloitte. However, the sector lacks a cohesive policy that governs retail trade pan-India. While the country has clear rules and regulations that govern foreign investment in single as well as multi-brand retail trade, there is a need for a model policy that can be adopted by states to drive greater benefits for small and medium traders.

What are the compliance issues?

The retail trade in India is governed by many laws, including the Shops and Establishments Act, the Competition Act, the Consumer Protection Act, the Essential Commodities Act, and the Legal Metrology Act. In many cases, retailers need to obtain between 16 and 25 licences to open a store, according to a 2020 CII report. Moreover, retailers need permits and licences from central as well as state governments and local authorities before opening and operating stores. The large number of laws, along with state-level variations in implementation, pose complexity for retailers.

What are retailers seeking?

Retail associations have been batting for a comprehensive policy for many years. Broadly, they are seeking streamlining of approvals and compliance mechanisms for ease of doing business; improving access to capital; rapid adoption of tech and modernization by traditional retailers; bridging logistics and supply chain infrastructure gaps and enhancing labour participation and productivity.

Is there a best practice to follow?

The CII report highlighted retail policies in developed markets aimed at helping both large and unorganized retailers. For instance, in 2016, Singapore rolled out a retail plan to help small retailers digitize their businesses and help SMEs acquire necessary skills. Singapore has also launched Hawkers Go Digital programme to enable greater adoption of digital payments by hawkers and stall owners. Applying for permits to operate a supermarket takes five working days in Singapore compared to 60-90 days in India.

What has government done so far?

Earlier this year, the Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed. The bill decriminalizes certain Acts like the Legal Metrology Act and the Food Safety Act, and rationalizes minor offences to enhance the ease of doing business. The National Retail Trade Policy is at a draft stage. Once enacted, it will provide a framework for states to create a uniform environment for retail ecosystem. A portal will be set up for retailers to apply for multiple licences to open and operate stores.