What is the government actually planning to change in the New Retail Policy which is expected to be announced soon?

The New Retail Policy or the NRP may be taking shape soon and that Government is going aggressive on revamping the retail space. It has identified 5 areas in its proposed National Retail Policy or NRP and a discussion paper has been launched on the subject.

The big focus areas that will be addressed in the NRP will be across ease of doing business, rationalisation of licensing, digitisation of retail, reforms focus and an open digital commerce network. These are expected to be the five key pillars.

Procedurally, retail is tough. For example, setting up a store requires up to 57 licenses, which is not feasible for any businessman. More so, considering that retail is India’s third-largest sector with consistent growth of 10-11% annually in the last few years.

Ecommerce as a subset of retail is not just growing faster but actually driving the retail story. Now, ecommerce has been consistently growing at above 28% annually and likely to sustain this growth rate for many more years to come into the future.

There is another reason the government is interested in this sector. The retail sector employs close to 5 crore people in India and hence its importance cannot be overstated. In addition, retail has the potential to create another 3 million jobs and will be largely responsible for alleviating the problems of the SME sector.