India's fast-growing food industry can be a model to the rest of the world, despite a restrictive regulatory climate, according to the country's largest retailer.

India's growing middle class drives an economy growing at 9% a year but debate surrounds the future direction of a market facing challenges of transport, distribution, infrastructure and swathes of red tape.

However, Kishore Biyani, CEO of Indian conglomerate and retail giant Future Group, was bullish about the prospects for the food industry.

"The Indian food industry, being so diverse and individualistic, has the potential to actually be a trailblazer in the global food business because of its underlying uniqueness," Biyani told the Food Forum India 2008 conference in Mumbai yesterday (6 May).

Future, an Indian conglomerate, is India's largest retailer and its Pantaloon Retail arm runs Big Bazaar hypermarkets and supermarket chain Food Bazaar.

India's retail sector, valued at US$350bn, is growing in the high double-digits a year, with companies including Future, Reliance Retail and Spencer's Retail opening outlets at the rate of one a day.

However, the organised retail sector attracts just about a third of Indian consumers and there has been fierce local opposition to the growth of large chains from owners "mom-and-pop" stores and a number of state governments.

India's six million "mom-and-pop" stores, called kirana in India, cater to low-income consumers and larger retailers are mulling franchising these outlets as they expand their networks.

For Biyani, however, Future would be unlikely to go down the route of franchising.

He said: "Franchising small businesses is not an option to consider, since they should remain in the market providing valuable insight into how they service the small communities they lie within."