E-COMMERCE in India has been booming and online giants like Amazon are spending big bucks on the world’s fastest growing major economy. Yet some investors are pouring money into retail mainstays of a bygone era — shopping malls.

    Private equity investors like Blackstone and Rothschild-backed Xander Group are looking for malls in India, betting that people will flock to stores as more foreign brands open and online retailers ease their aggressive discounting.

    Indian malls, which are evolving from ramshackle collections of stores to modern plazas complete with air conditioning and family entertainment centers, are seen as a gateway to brands that a growing middle class aspires to own.

    The rise of the mall in India, at a time when many in the United States are becoming debt-ridden white elephants, has been helped by a flurry of new regulations that are encouraging investors to take a fresh look at traditional retail.

    They include easing foreign investment rules for single-brand retailers, longer shopping hours and a new framework for establishing real estate investment trusts (REITs).

    “Almost every retailer would like to be here, and as they come they need quality space,” said Siddharth Yog, chairman of Xander, whose Virtuous Retail arm owns 5 million square feet of operational and under-development malls in India.

    Xander is looking to buy and build new malls in cities like Delhi, Mumbai and Hyderabad, said Yog, as the outlook for physical retail stores brightens in India.

    Investors had long shied away from shopping malls in India, amid weak consumer spending and deep discounts by online retailers like Amazon and local rivals Flipkart and Snapdeal.

    Now online upstarts are under pressure from investors to produce returns, and this, combined with government regulation to ease online discounts, is reducing their advantage.(SD-Agencies)