Political risk

The political risk of doing retail business in India presents both opportunities and challenges due to the country’s changing political and regulatory environment. India’s regulatory landscape is constantly evolving, with frequent policy changes affecting foreign direct investment (FDI), e-commerce, and digital payments. The country also has local sourcing requirements and a push for data localization, which increases the complexity of compliance (Singh & Kumar, 2022). Additionally, rising economic nationalism, driven by initiatives like “Make in India” and “Vocal for Local,” creates barriers for foreign companies, especially with tariffs and trade restrictions (Sharma, 2021). Social and cultural norms are also important, as businesses must consider religious practices, local traditions, and state-level differences. A failure to navigate these norms can lead to public backlash (Patel, 2023). While regulatory reforms like the Goods and Services Tax (GST) and labor law changes aim to simplify business, they can also create challenges during the transition period (Gupta & Rao, 2020). Successful businesses in India adapt to local market conditions, stay alert to policy shifts, and manage operations in line with both national and regional priorities (Bose, 2019).