India has emerged the most attractive retail destination for investors among 30 emerging markets, says a report by US-based global management consulting firm AT Kearney.
According to the company's Global Retail Development Index (GRDI), India tops the list of most attractive retail destination followed by Russia and China.
Last year, India was at the second position.
"Low inflation and rent reductions of up to 40 percent in tier-2 and -3 cities also help make India the most attractive retail investment destination in the 2009 GRDI," the report said.
"In India, slower retail sales are causing Indian retailers to delay expansion plans and restructure their operations. But this has opened the window of opportunity for global retailers and many, including Wal-Mart, Carrefour and Tesco, are continuing expansion plans as Indian consumers grow increasingly affluent, brand-conscience and familiar with global retail formats," the report said.
Other Asian countries on the list are United Arab Emirates, Saudi Arabia, Vietnam and Malaysia.
"Larger, resilient developing countries sit atop the 2009 GRDI as they are most likely to lead the economic recovery. For the fourth time in five years, India is the most attractive country for retail investment according to the Index," the report said.
"With economic conditions in developed markets improving slowly, emerging markets are becoming much more important sources of growth for global retailers," said Hana Ben-Shabat, AT Kearney partner and co-leader of the study.
Added Michael Moriarty, also a partner and study co-leader: "Countries throughout Asia are well positioned for an early recovery from the economic crisis as domestic demand is holding up well, GDP growth continues and trillions of dollars of sovereign reserves are providing governments and state banks with tools for action."
Moriarty said Asian countries continued to transform their economies with domestic consumption as a primary focus, adding that it was "a trend that should favor continued growth in retail over the long term".