India has surpassed China to secure the top position among 30 developing countries in ease of doing business, according to a study by the Global Retail Development Index for 2017, PTI reported.

The GRDI, which has released its 16th edition this year, ranks the top 30 developing countries for retail investment worldwide, and analyses 25 macroeconomic and retail-specific variables.

India’s rapidly expanding economy, easing of Foreign Direct Investment rules and a major increase in consumption are the factors which took India to the No 1 ranking, said the GRDI study.

India’s retail sector has been growing at a rate of 20% annually, said the PTI report. Total sales surpassed the $1 trillion mark last year, and the sector is expected to double in size by 2020.

Management consulting firm AT Kearney said rapid urbanisation and a growing middle class with higher income levels is also driving up consumption across the country, and this is further helped by the government easing FDI regulations in key areas of the retail sector.

In the past year, the government has allowed up to 100% foreign ownership in B2B e-commerce businesses, and for retailers who sell food products. India’s retail sector, which has also benefited from e-commerce, is now projected to grow at 30% annually and reach $48 billion by 2020.

The Narendra Modi government’s move to promote cashless transactions following demonetisation of currency, and its introduction of the Goods and Services Tax regime are also expected to accelerate adoption of formal retail.

But the World Bank has ranked India a lowly 130th overall on its global Doing Business index in 2017, an improvement of just one spot from the previous year.

Meanwhile, China has fallen to second place in the GRDI ranking. Despite its slower overall economic growth as compared to India and its past years, the Chinese market’s size and the continued evolution of retail still make the country one of the most attractive markets for retail investment, the GRDI study said.