India’s retail market is forecast to grow more than twofold, rising from ₹90–95 trillion in 2025 to approximately ₹210–215 trillion by 2035, according to a joint report by Boston Consulting Group and the Retailers Association of India. Robust GDP growth, rising incomes, urbanisation, and an expanding middle class are fuelling sustained consumption across categories. However, long-term success will hinge on strategic focus, omnichannel integration, supply chain modernisation, and continuous digital transformation. The report identifies artificial intelligence and “agentic commerce” as key disruptors, noting that comprehensive AI adoption can unlock substantial performance gains.
The rapid expansion of organised retail, sustained growth in e-commerce, and strengthening digital infrastructure are reinforcing India’s position as a leading player in the global retail arena.
India’s retail market is set for a dramatic expansion, projected to more than double in size to ₹210–215 trillion by 2035 from ₹90–95 trillion in 2025, according to a joint report by Boston Consulting Group and the Retailers Association of India. The report, “Winning Codes for Retail 2035: Capturing the ₹200 trillion prize,” was presented recently at the Retail Leadership Summit 2026 in Mumbai. It underscores the country’s robust consumption momentum and emphasises that technology — particularly artificial intelligence (AI) — will be a defining force in driving the next phase of retail growth.
The expansion is underpinned by India’s strong macroeconomic momentum. With GDP growth estimated at 8% in 2025, the country remains among the world’s fastest-growing major economies. Rising incomes, urbanisation, and a resilient consumption cycle are accelerating retail demand, positioning India to become the world’s third-largest economy by 2030. This economic strength is translating into sustained consumption growth across categories, from essentials to discretionary products.
However, the report notes that scale alone will not define success. As the market matures, consumer behaviour is becoming more nuanced and context-driven. Shoppers increasingly expect both convenience and differentiation, seeking personalised experiences, seamless omnichannel journeys, and brands that align with their evolving preferences.
Retailers can no longer rely on broad-based strategies; instead, they must define clear consumer focus segments and make deliberate trade-offs to stand out in an intensely competitive landscape.
AI and Agentic Commerce redefining retail dynamics
A central theme of the report is the transformative impact of artificial intelligence (AI). India’s internet user base has more than tripled since 2016, creating strong “adoption elasticity” for emerging technologies such as Generative AI. The sector is now moving beyond basic e-commerce transactions toward AI-guided discovery and decision-making. The rise of “agentic commerce” — where AI agents actively assist consumers in researching, comparing, and purchasing products — is reshaping retail dynamics globally and gaining traction in India.
According to the analysis, retailers that implement end-to-end AI transformation across merchandising, marketing, and supply chains can unlock performance gains of 40-60%. This far exceeds the 10-15% improvements typically achieved through isolated digital experiments. Embedding AI across the shopper journey, enabling agent-led functions, and leveraging advanced analytics for inventory and demand forecasting are emerging as key differentiators.
The report emphasises that capturing the ₹200 trillion opportunity will require more than sales growth. Retailers must redesign operating models, upgrade talent capabilities, and institutionalise digital transformation as a continuous discipline rather than a one-time initiative. Retailers that synchronise their technology investments with well-defined strategic priorities and shifting consumer journeys will be best positioned to gain a larger share of the sector’s long-term value creation.
As India advances toward this milestone, disciplined execution combined with AI-led innovation will determine which retailers lead the next era of growth.
India’s retail industry has evolved into one of the country’s most dynamic growth engines, supported by rising consumer demand, demographic strength, and increasing participation from domestic and global players. The sector contributes over 10% to GDP and around 8% to total employment, highlighting its central role in the economy. India secured the 63rd position in the World Bank’s Doing Business 2023 rankings. Backed by a vast middle class and considerable untapped market potential, India is considered one of the most attractive destinations globally for retail investment.
Increasing disposable incomes, especially in urban areas, are transforming consumer spending patterns across multiple categories. Branded goods in apparel, cosmetics, footwear, watches, beverages, food, and jewellery are increasingly becoming part of everyday lifestyles rather than discretionary splurges. This structural shift toward aspirational consumption is being reinforced by rapid urbanisation and expanding household incomes.
Retail infrastructure is growing in parallel to support this demand. India’s seven largest cities are expected to add 16.6 million sq. ft. of new shopping mall space by 2026, strengthening organised retail penetration. Organised retail is projected to expand significantly by 2030, driven by income growth, evolving consumer preferences, and deeper formalisation of the sector.
India’s strong demographic profile — including the world’s largest population and an expanding middle-income segment of approximately 158 million households — further enhances its retail appeal. Increasing urbanisation, improved rural connectivity, and rising household spending are widening the consumer base. Government reforms aimed at improving the ease of doing business and liberalising foreign investment norms have also made it easier for global retailers to establish wholly owned subsidiaries and scale operations in the country.
The consumption story extends beyond traditional retail into direct selling and e-commerce. India’s direct selling industry has demonstrated resilience despite global uncertainties. At the same time, the country has become the world’s third-largest e-retail market by shopper base, driven by rapid internet adoption, digital payments growth, and expanding online consumer engagement.
E-commerce is projected to witness substantial expansion by 2035, supported by the rise of Direct-to-Consumer (D2C) brands and modern logistics networks. The warehousing ecosystem is also scaling up rapidly to meet growing demand. Meanwhile, India’s broader digital economy is expected to grow sharply by 2030, generating millions of jobs.
Collectively, these developments underscore the depth of India’s consumption-driven growth and reinforce its emergence as a major force in global retail and digital commerce.
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FAQ
India’s retail market is projected to more than double from ₹90–95 trillion in 2025 to ₹210–215 trillion by 2035, according to a joint report by Boston Consulting Group and the Retailers Association of India.
Strong GDP growth, rising disposable incomes, urbanisation, and an expanding middle class are key drivers. Increased digital adoption, growing organised retail penetration, and improved infrastructure are also accelerating consumption across essential and discretionary categories.
AI is expected to transform merchandising, marketing, supply chains, and customer engagement. End-to-end AI integration — including “agentic commerce” — can significantly enhance efficiency, improve demand forecasting, personalise shopping experiences, and deliver higher performance gains than isolated digital initiatives.
India has become the world’s third-largest e-retail market by shopper base. Rapid internet penetration, digital payments growth, Direct-to-Consumer (D2C) brands, and expanding logistics networks are expected to drive strong e-commerce expansion through 2035.
Retailers must move beyond scale and adopt clear consumer segmentation strategies. Success will depend on omnichannel integration, AI-driven decision-making, supply chain modernisation, talent upskilling, and continuous digital transformation aligned with evolving consumer expectations.
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