India’s US$1.06 trillion retail sector is set to reach $1.93 trillion by 2030 per Deloitte–FICCI report

New Delhi, 20 August 2025: India’s retail and consumer landscape is undergoing a transformation, powered by robust domestic consumption alongside a surge in digital adoption, premiumisation and the rapid rise of e-commerce across both urban and emerging markets. Deloitte and FICCI have launched a new report titled ‘Spotting India’s PRIME innovation moment’ which highlights the immense potential of the sector. Valued at US$1.06 trillion in 2024 and projected to nearly double to US$1.93 trillion by 2030 at a 10 percent CAGR, the sector’s momentum is anchored by a deep home market that acts as a buffer against global trade volatility. Evolving Free Trade Agreements (FTAs) and tariff realignments are further enhancing India’s export competitiveness allowing ‘Made in India’ products to reach new markets with reduced barriers and cost advantages. Rising purchasing power, including Gen Z’s direct spending capacity of US$250 billion, is not only sustaining domestic demand but also fuelling brand confidence to scale internationally. This convergence of domestic resilience and improved global market access positions India as both a consumption powerhouse and a formidable export base.

India’s FMCG and retail sectors are entering a transformative decade, amplified by a digital‑first, premium‑yet‑inclusive consumption wave, the rapid expansion of quick commerce and the explosive growth of direct‑to‑consumer (D2C) brands. The sector is entering a new era shaped by tech‑enabled, sustainable and hyper‑personalised consumer experiences. Tier II and Tier III cities, private labels and localised manufacturing are emerging as the new engines of growth, creating millions of jobs and strengthening India’s position as a global consumption powerhouse.

The report notes that the Indian economy continues to display robust fundamentals, backed by strong domestic demand, an expanding middle class and a rapidly growing digital consumer base. The retail sector, contributing over 10 percent to India’s GDP and employing nearly 8 percent of the workforce, is undergoing accelerated transformation driven by innovation, policy support and evolving consumer values. It identifies new growth drivers, including omni‑channel retail, localised production, hyper-personalisation and circular consumption models, while highlighting how empowered consumers, particularly from Tier II and III cities, are reshaping demand patterns across product categories. 

Six key consumer demand trends

1. Digital‑first consumption gains ground – Online marketplaces now influence 73 percent of purchase decisions, with YouTube reviews (40 percent) and peer recommendations (51 percent) emerging as trusted alternatives to traditional influencer marketing. India’s D2C market crossed US$80 billion in 2024 and is on track to exceed US$ 100 billion in 2025, redefining how brands scale and connect with consumers.
2. Gen Z fuels aspirational premiumisation – Set to account for 43 percent of total consumption in 2025 with a direct spending power of US$ 250 billion, Gen Z is driving demand for premium products across fashion, electronics and personal care. The luxury fashion resale market alone is projected to grow at a 13 percent CAGR through 2032, reflecting a shift towards high‑value, aspirational purchases.
3. ‘Made in India’ earns consumer trust – The preference for locally-made products is strengthening, with 68 percent of consumers favouring Indian brands in Food & Beverages, 55 percent in Home Décor and 53 percent in Personal Care. Local sourcing, regional flavours and domestic manufacturing are emerging as strong competitive advantages.
4. Tier II & III cities power omni‑channel growth – Over 60 percent of e‑commerce transactions now originate from Tier II and III cities, signalling a retail shift beyond metros. Malls and high‑street spaces are evolving into experiential hubs, while cities such as Bengaluru and Hyderabad accounted for 60 percent of total retail space absorption in 2024.
5. Quick commerce transforms market access – India is the world’s first scaled quick‑commerce market, operating in 80+ cities and growing at 70–80 percent CAGR. The model is fuelling last‑mile job creation and enabling faster FMCG and lifestyle brand penetration into new markets.
6. Sustainability shapes brand preference – More than 60 percent of Gen Z and millennials prefer brands with transparent sustainability practices. Demand is rising for eco‑friendly packaging, clean‑label products and resale models, with sustainable, functional and plus‑size fashion projected to exceed US$18 billion by FY32.

While challenges such as global demand uncertainty, supply chain pressures and talent upskilling persist, the sector’s long-term outlook remains strong precisely because of this domestic demand resilience. In a global environment where tariff structures can shift overnight, companies that leverage India’s thriving internal market, strengthen local manufacturing capabilities and align with forward-looking trade and regulatory frameworks will not only withstand volatility but also unlock new export opportunities. This powerful combination of strong home-base demand, agile supply chains and supportive trade policy positions India to lead globally in retail and consumer innovation, setting benchmarks that others aspire to match.