A recent report has highlighted that private consumption has surged from US$1 trillion in 2013 to US$2.1 trillion in 2024 (7.2 percent CAGR), outpacing the US, China and Germany. By 2030, India’s GDP is projected to reach US$7.3 trillion, with consumption contributing 60 percent to the economy, as per the reports in India’s discretionary spend evolution: A roadmap for brands, released by Deloitte India with Retailers Association of India.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI) said, “India’s discretionary spending is entering a new phase of growth, driven by rising incomes, digital adoption and evolving consumer preferences. This joint report by RAI and Deloitte provides a roadmap for brands to navigate these shifts andcreate meaningful engagement with today’s aspirational consumers. As organised retail and new commercemodels expand, businesses that align with these trends will unlock immense opportunities for growth and innovation.”
Key drivers of India’s consumer boom
By 2030, the number of Indians earning over US$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. Several key forces are driving this consumption boom:
· Premiumisation and evolving consumer preferences: With rising afluence, consumers prioritise quality, convenience and experiences over price. Gen Z and millennials, who account for 52 percent of the population, drive this shift, driving demand for premium brands, sustainable products, andpersonalised experiences.
· Digital and financial inclusion driving spending: Credit access is expanding at an unprecedentedpace, with credit card penetration 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 e-commerce adoption and fuelling a new wave of digital-first consumption.
· Shift in household spending patterns: As disposable incomes rise, essential spending on food has declined—rural food expenditure has dropped from 60 percent to 47 percent, and urban foodexpenditure has declined from 48 percent to 40 percent. This reflects a growing inclination towards dining out, travel, wellness, and other discretionary categories such as fashion, fitness, home improvement, and consumer durables.
· Rise of organised retail and experience-led consumption: Organised retail is expanding rapidly,registering a 10 percent CAGR. It is expected to reach US$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.
