India private consumption at $2.1T, set to be 3rd largest consumer market by 2026: Report
According to a report by Deloitte India with Retailers Association of India, India is well-positioned to reap the benefits of a demographic dividend.
India's private consumption has almost doubled to $2.1 trillion in 2024 from $1 trillion in 2013, growing at 7.2% CAGR, faster than the US, China and Germany, according to a report.
On course to become the world's third-largest consumer market by 2026, India is well-positioned to reap the benefits of a demographic dividend, said the report titled 'India's changing discretionary spending: Key insights for brands' launched by Deloitte India with Retailers Association of India on Thursday.
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Surpassing Germany, India's private consumption has almost doubled to $2.1 trillion in 2024 from $1 trillion in 2013, and during 2013-23, India's consumption grew at 7.2 % CAGR, faster than China, the US and Germany," it said.
By 2030, the report said, "The number of Indians earning over $10,000 annually is expected to nearly triple, increasing from 60 million in 2024 to 165 million. This reflects the significant growth of the country's middle class and a fundamental shift towards discretionary spending."
It pointed out that several key forces are driving the consumption boom, including premiumisation and evolving consumer preferences, as with rising affluence, consumers are prioritising quality, convenience and experiences over price.
Gen Z and millennials, who account for 52% of the population, are driving this shift and the demand for premium brands, sustainable products, and personalised experiences.
"India's consumer landscape is undergoing a fundamental transformation. The surge in discretionary spending, expanding digital commerce and increasing access to credit are redefining the rules of engagement for brands," Deloitte India Partner and Consumer Industry Leader Anand Ramanathan said.
By 2030, he said, "India's per capita income is expected to exceed $4,000, unlocking new opportunities across sectors. Businesses have an incredible opportunity to tap into evolving consumer expectations -- by balancing affordability, convenience and sustainability while harnessing data and technology to create highly personalised experiences."
Retailers Association of India (RAI) CEO Kumar Rajagopalan said India's discretionary spending is entering a new phase of growth, driven by rising incomes, digital adoption and evolving consumer preferences.
"As organised retail and new commerce models expand, businesses that align with these trends will unlock immense opportunities for growth and innovation," he noted.
The report said digital and financial inclusion is driving spending in India with credit access expanding at an unprecedented pace, while credit card penetration is set to triple from 102 million in 2024 to 296 million by 2030, enabling increased consumer spending.
Fintech solutions and digital payments such as UPI are reshaping how consumers engage with brands, boosting ecommerce adoption and fuelling a new wave of digital-first consumption, it noted.
Moreover, rise of organised retail and experience-led consumption has also helped in driving consumption.
"Organised retail is expanding rapidly, registering a 10% CAGR. It is expected to reach $230 billion by 2030. Consumers are increasingly drawn to experience-led retail spaces, omnichannel shopping and hyper-personalised services, pushing brands to rethink engagement strategies," the report said.
Edited by Jyoti Narayan