For the buzzing retail sector, the year 2007 was more like a roller coaster ride. Around this time last year, the sector was buzzing with euphoria and hope.

Sunil Mittal-led Bharti Enterprises had finally announced that it would partner with the world?s largest retailer, the US-based Wal-Mart, ending a suspense that lasted several months. Reliance Retail had kick-started its retail venture. However, a year down the lane, the euphoria seems to have dried up.

Many had expected the government to go ahead and open multi-brand retail to foreign players as it had, a year back, partially opened single-brand retail.

However, towards the end of the year, far from any such expectation bearing fruit, it was the domestic retail biggies, which were running for cover.

The government decided to first conduct a comprehensive study to assess the impact of organised retail on the unorganised sector.

The economic think tank, Icrier, which is slated to submit its report in January, is sure to raise a storm, given the high stakes involved.

Reliance Retail, billed as the most ambitious retail roll-out by an Indian corporate, saw its plan go awry with a series of attacks on its Reliance Fresh stores by local traders and intermediaries backed by an assortment of political groupings. The development saw the company shutting shop in a populous state like Uttar Pradesh and watering down plans elsewhere.

However, hope is still not lost. Commerce and industry minister Kamal Nath has said that the government would adopt a calibrated approach towards opening of the sector. He said that segments like consumer durables and sports and equipment would be opened. This would automatically ensure that foreign players do not compete with the small, unorganised retailers. However, with polls barely a year away, it?s anybody?s guess how far the government will venture.

The year also saw some of the domestic biggies finally announcing or foraying into the retail sector. The Aditya Birla Retail launched its stores announcing an investment of Rs 8,000 crore. Bharti Retail also announced its plans outlining an investment of $2.5 billion by 2015.

Interest in the growing Indian retail sector, however, remained alive despite the hiccups. For instance, the world?s second largest retailer, the 97.24-billion euro French major, Carrefour announced its plan to foray in the year 2009 and experts say that others would soon follow. Amongst the challenges facing the sector, rentals top the list, followed by logistics and manpower crunch.