While the new retail policy allows for retail sales locations to be set up only in cities with a population of over 10 lakh, it is silent on the growing online retail trade pioneered by companies such as eBay and Amazon.
When asked about this aspect at a press conference here, the Commerce, Industry and Textiles Minister Mr Anand Sharma admitted that the issue of online retail trade has not been adequately addressed by the policy.
He said that online retail trade in India is only at a nascent stage, but added that nevertheless, the Department of Industrial Policy and Promotion will look into the issue.
The Government's new retail policy says retail sales locations can only be in cities with a population of over 10 lakh as per 2011 Census, adding that only 53 cities qualify for FDI in multi-brand retail out of nearly 8,000 towns and cities. Besides, it says, retail locations may cover an area of 10 km around the municipal limits of such cities.
But interestingly, online retail escapes this 10-km norm as e-commerce transcends geographical barriers.
According to the Internet and Mobile Association of India, the country had 112 million internet users by September. What is more, 5-7 million more internet users are being added to this number every month. In five years time, it is expected to touch 600 million.
It is estimated that there are over 17 million internet shoppers in India. The US has the world's largest number of online shoppers with 175 million, followed by China with 145 million.
According to the industry body Assocham, the market size of e-commerce industry is expected to be Rs 46,520 crore by December 2011. The size of e-commerce globally is around $700 billion, Assocham said, adding that the online retail market is worth $241 billion in Europe, $176 billion in the US, $76.4 billion in China and $10.3 billion in India.
Assocham estimates the Indian retail industry to be worth $520 billion currently. It also expects the online retail industry in India to touch $1.4 billion by 2015.