Purpose of the Study: This paper investigates the role of automation and artificial intelligence (AI) in the Indian retail sector, focusing on strategic operations, efficiency gains, and ethical considerations. AI has become essential for the transformation of retail, helping businesses optimize operations, improve customer experiences, and scale operations effectively. However, there is a notable lack of research on the localized ethical challenges that arise from AI adoption in Indian retail, particularly concerning data privacy, employment displacement, and algorithmic biases unique to India's diverse socio-economic landscape. Methods Used: The research utilizes a literature review and case study method to analyze the current status of AI application in the Indian retail industry, supported by quantitative analysis drawn from market reports, academic articles, and industry white papers. Key Findings: AI and automation provide substantial efficiency gains through improved logistics, inventory management, and customer personalization. On the other hand, ethical issues related to data privacy, employment disruption, and algorithmic biases remain significant concerns that require further attention. Conclusions: While AI offers profitability and enhanced efficiency, addressing the ethical dilemmas associated with its adoption is crucial. Regulatory frameworks and corporate responsibility measures are necessary to ensure AI's sustainable integration into Indian retail. The future of AI in this sector will depend on navigating these challenges while capitalizing on its transformative potential.