India’s capital New Delhi continued to witness a decline in retail rentals of 25 per cent and ranked 69th in rentals among the list of major cities across the world during the first quarter of 2009, according to global real estate consultancy CB Richard Ellis.

Prime retail rentals continued with their downward trajectory worldwide during the period which saw New York maintaining the top slot among cities with high rentals despite a 10 per cent annul decline. New Delhi ranks 69th globally with an average rental of $109 per sq ft each month.

“Demand for retail space has declined in most markets across the world as consumers cut back on spending and unemployment continues to rise in many countries. New Delhi in India saw a 25 per cent decline in a six month period,” CBRE said in its report ‘Global Retail Rents Market View Q1′.

Hopes that the Indian retail sector may be opened any further have been dented. The government have announced that the interests of small traders will be protected as the industry is the second largest employer after agriculture.

“The government is fully committed to securing the legitimate interests of all stakeholders engaged in the retail business,” said Minister of State for Commerce Jyotiraditya Scindia. “The government also fully recognises the need to ensure that small retailers are not adversely affected by the growing organised retail and that there is no adverse effect on employment,” Scindia said in a written reply in the Rajya Sabha, the lower house.

In his reply, the minister also enclosed a study by the Indian Council for Research on International Economic Relations (Icrier), which says the country’s retail trade industry will grow 10 per cent per annum from $10 billion in 2006-07 to $496 billion in 2011-12.

It said the organised retail trade segment of the industry, which presently stands at just 4 percent, will grow at a much faster pace of 45-50 percent, to grab a 16-percent share of the market by 2011-12. The study, however, made a pitch for opening up of retail trade sector, saying there was no evidence of a decline in overall employment in the unorganised sector as a result of the entry of large companies into the business.

The study also said farmers stood to benefit “significantly” by selling directly to organised retailers. “Profit realisation for farmers selling directly to organised retailers is about 60 per cent higher than that received from selling in the mandi (wholesale market),” the Icrier report said.