India has surpassed the US, China, and Germany in terms of increasing private consumption. A report claims that by 2026, India will become the third-largest consumer market in the world.
According to the report released on Thursday by Deloitte India, in collaboration with the Retailers Association of India, private consumption in India will reach $2.1 trillion by 2024, doubling from $1 trillion in 2013. These figures show that private consumption in the country is growing at a compound annual growth rate (CAGR) of 7.2%, outpacing the growth rate of the US, China, and Germany.
The report highlights several factors driving the rapid increase in private consumption in India, including higher premium payments and a shift in consumer preferences. As prosperity grows, consumers are prioritizing quality, convenience, and experience over price. The report also notes that India is well-positioned to leverage its demographic dividend and become the third-largest consumer market by next year.
Digital Inclusion Driving Access to Credit
Digital and financial inclusion is accelerating access to credit at an unprecedented pace. The number of credit card holders is expected to triple from 102 million in 2024 to 296 million by 2030, driving an increase in consumer spending.
Fintech solutions and digital payments such as UPI are transforming the way consumers engage with brands. E-commerce adoption is also boosting the new wave of digital-first consumption.
Number of Earners Over $10,000 to Triple
The report states that by 2030, the number of Indians earning over $10,000 will almost triple. The number of such earners is expected to grow from 60 million in 2024 to 165 million by 2030. This reflects significant growth in India’s middle class and a fundamental shift towards discretionary spending.
Generational Shift in Consumer Preferences
Generation Z and Millennials, who make up 52% of the total population, are driving the demand for premium brands, sustainable products, and personalized experiences.
Per Capita Income to Exceed $4,000
India’s per capita income is expected to exceed $4,000 by 2030, creating incredible opportunities for businesses to meet the evolving expectations of customers.
Transformation in Consumer Landscape
Deloitte India Partner Anand Ramnathan stated that India’s consumer landscape is undergoing a transformation. Increased discretionary spending, the expansion of digital commerce, and improved access to credit are redefining the rules for brand engagement. Kumar Rajgopalan, CEO of the Retailers Association of India, noted that the growth in discretionary spending is entering a new phase, driven by rising incomes, digital acceptance, and evolving consumer preferences.
Organized Retail Business in India to Reach $230 Billion
India's organized retail business is growing at a rate of 10% annually. Due to increased disposable income and evolving consumer preferences, the organized retail market is expected to reach $230 billion by 2030.