Retailing is the largest private sector industry in India and the second largest employer after agriculture. Retail trade in India currently accounts for around 11% of GDP and employees over 8% of the total workforce. India is in the focus of international retailers and A.T. Kearney's 2006 report placed this market as the most attractive for retailers. This article deals with the retail developments in India, growth of new retail formats, segment wise development and challenges for retailers in India.

The purchasing capacity of the middle class of India is increasing with the country's economic growth. The consumer is more demanding in terms of quality and price. Competition is becoming fierce day by day. Therefore, evolving consumer in association with economic progress is likely to bring changes to the retail sector in India. Yet, the sector is not open for the global players like Wal-Mart, Carrefour, Metro and other who are desperate to operate in India. But the scenario is likely to change in future. In January 2006, the Indian Government boosted upscale retailers by allowing foreign companies to own a controlling interest of 51% in joint ventures operating "single-brand" stores.

Per capita income is increasing and consumer spending by major households has been growing at 16% per annum. Apart from that the booming IT and BPO sector is helping the young graduate to earn more in comparison to the other sectors or industries. In 2005, the average Indian salary surged 14% (18% for IT professionals), the highest wage growth in Asia, according to a study by Hewitt Associates, a global human-resources company. There are now about 1.6 million Indian households that spend an average of $9,000 per year on luxury goods, according to The Knowledge Company, a management-consulting firm of New Delhi. These factors are likely to boost the growth of organized retailing not only in the metros but also all over India.

An Analysis of Changing Dynamics of Indian Retailing, private sector, agriculture, international, market,purchasing capacity,economic growth, Competition, global players, single-brand, global human-resources, management, luxury goods,Trading,smaller towns, villages, Rural retailing,Tata Chemicals, agri-store, dry groceries, electronic goods.