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According to a Deloitte India-RAI analysis, India's private consumption has increased from USD 1 trillion in 2013 to USD 2.1 trillion in 2024, at a CAGR of 7.2%. By 2030, consumer expenditure is expected to account for 60% of India's USD 7.3 trillion GDP, driven by rising incomes, better credit access, and digital commerce. Discretionary spending is migrating to luxury brands, travel, eating, and wellness, driving organised retail to USD 230 billion. This revolution is altering retail real estate in India, with a growing need for experience-driven malls, mixed-use complexes, and logistics hubs.
India's private consumption has seen a significant increase, rising from USD 1 trillion in 2013 to USD 2.1 trillion in 2024. This growth, as highlighted in a report by Deloitte India and the Retailers Association of India (RAI), reflects a 7.2 percent compound annual growth rate (CAGR), surpassing growth in major global economies. The report projects that by 2030, India's GDP will reach USD 7.3 trillion, with consumer spending contributing 60 percent of this growth. This surge in consumption is reshaping India's retail landscape and impacting the real estate sector. Advertisement
The growth in discretionary spending is driven by several factors, including rising incomes, increased access to credit, and the growing influence of digital commerce. By 2030, the number of Indians earning over USD 10,000 annually is expected to nearly triple, indicating a significant expansion of the middle class. This rise in affluence is leading to a shift in consumer preferences, with a greater emphasis on quality, convenience, and experiences. Gen Z and millennials, who make up a significant portion of the population, are driving this trend, demanding premium brands, sustainable products, and personalized experiences. Increased credit access, with credit card penetration expected to triple by 2030, and the adoption of digital payment solutions like UPI, are further fueling consumer spending.
The shift in spending patterns is also impacting the types of retail spaces being developed. As disposable incomes rise, spending on essential goods like food is decreasing, while spending on discretionary categories such as dining out, travel, wellness, and consumer durables is increasing. This trend is driving the expansion of organized retail, which is expected to reach USD 230 billion by 2030. Consumers are increasingly seeking experience-led retail spaces and omnichannel shopping experiences, pushing brands to rethink their engagement strategies.
Retail growth in India is closely tied to the increase in private consumption. The expansion of organized retail and the demand for experience-led spaces are influencing the development of new retail properties. The increase in disposable income has changed how consumers spend their money.
Real estate development is also being impacted by the changing retail landscape. The demand for modern retail spaces, including shopping malls and mixed-use developments, is rising. The growth of e-commerce and digital payments is also influencing the demand for warehouse and logistics spaces. The increasing middle class is also driving demand for housing.
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