India’s Retail Market – Looking Ahead

Now in 2024, India’s retail market currently the fourth largest in the world, is undergoing significant transformation. This is fueled by a range of shifting socio-economic factors, digital and technical changes as well as a rapidly transforming consumer landscape. India’s retail market contributes around 10% of the total GDP to the country and employs around 8% of the total workforce. Pawan Bhatnagar, Asian Insiders’ partner in India offers compelling evidence that India’s retail market is worth serious and long-term investor attention.

While the pandemic dealt a serious setback to India’s retail market, the sector has recovered strongly with 60 new malls, encompassing over 2 million sq. metres of fresh retail space, due for completion by 2025. Rising incomes and growing urbanisation means that retail remains one of India’s strongest growth sectors, with up to 25 million projected new jobs by 2030, the single largest job creator in the country. India, like China recently is shifting from an agricultural and production economy to a consumer economy and with around 1.5 billion people, that’s a lot of consumer power. As India’s social and economic transformation continues, there will be decades of retail growth to come. A recent study suggested that India’s retail market will reach a value of USD 2 trillion by 2032.

The world’s largest population has become impossible for global brands to ignore. As international brands and investment arrive, along with the continued development of home Indian brands, fresh choices become available to Indian consumers in both product range as well as channels of choice. A balance is emerging across shopping formats including the established structure of department stores, hypermarkets and specialty stores. Organised retail chains are now well established across tier 2 and tier 3 cities, further adding to the national consumer power.

However, of course, e-commerce has arrived, valued at around USD 55 billion, disrupting the traditional retail landscape, offering greater convenience, choice and competitive pricing. While larger players such as Amazon, Flipkart and reliance’s JioMart took advantage of the upheaval created by the pandemic, traditional retails have had time to embrace technology and offer innovative digital channels to their traditional retail structures. Major retail brands can utilise their market power to leverage their brands building omnichannel presence and detailing personal shopping into more complete consumer experiences.

Indian consumers, following those of the west, are becoming more discerning, seeking personalised experiences, value for money and preferences for a wider, often international range of choices. The expanding middle class are driving demand for premium and branded goods and those that cater to healthier lifestyle and sustainable choices. The rapid growth of the niche market has real power in a society as large as India’s retail market.

The Indian government has further introduced several initiatives to support the growth of the retail sector and attract investment. The introduction of Goods and Services Tax (GST) has streamlined the taxation system, reducing logistical complexities and improving the ease of doing business for retailers. Additionally, initiatives like ‘Make in India’ and ‘Digital India’ aim to promote domestic manufacturing, boost entrepreneurship, and enhance digital infrastructure, thereby fostering growth opportunities for retailers. remaining regulatory challenges such as complex licensing procedures, restrictions on foreign direct investment (FDI), and compliance issues continue to pose hurdles for retailers, necessitating further reforms to unleash the sector’s full potential.

Despite its immense growth potential, the India’s retail market does face some challenge including infrastructural bottlenecks, supply chain inefficiencies, and widespread competition. The fragmented nature of the market, with numerous smaller retailers, leads to issues in scale, standardisation, and operational efficiency. However these also present opportunities for innovation, collaboration, and consolidation. Opportunities are abundant for partnerships between retailers and technology providers, investors in supply chain optimisation, and retail data analytics specialist operators. The government is assisting in this area directly also, by backing a number of technologies in digital transactions, such as UPI, RuPay, DigiLockeretc and to drive further innovation.

Around 87% of Indian households will have an internet connection by 2025, with a 21% rise also in duration of internet access through mobiles, since 2019. India’s retail market is projected to grow to be the second largest by 2030 with around 500 to 600 million shoppers. Over the next ten years, tier 2 and 3 cities will contribute around 90% of new online consumers and USD 150 billion of increased retail value. By 2025, there will be 1 billion internet users and a projected annual growth off 18% for the e-commerce market.

Clearly this is an attractive market for international retail and consumer brands, as well as companies operating in building channels and retail infrastructure. Emerging from the pandemic, India’s retail market has demonstrated resilience, innovation and adaptability and is looking towards a commercial future encompassing a burgeoning middle class, the growth of physical and digital infrastructure along with the development of further modern urban cities. Pending liberalisation of regulations will allow 100% FDI in single brand retail under the automatic route.

India’s retail market offers tremendous opportunity for international companies to successfully enter this market. This will require considerable strategic planning and resourcing, and Asian Insiders offers vast experience in this area. We’re available to talk on any aspect of this so for a no obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at) or Pawan Bhatnagar, India Partner: pawan.bhatnagar(at)

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