India’s Private Consumption Reaches $2.1 Trillion; Outpacing Global Economies

India’s private consumption has surged to $2.1 trillion in 2024, marking an impressive 7.2% annual growth, according to the latest Deloitte-RAI report titled India’s Discretionary Spend Evolution: A Roadmap for Brands.

This growth has outpaced major global economies like the US, China, and Germany, signaling a significant shift in India’s economic landscape. With per capita income surpassing $2,000 in FY25 and expected to exceed $4,000 by 2030, India’s purchasing power is set to grow even further.

The report projects that by 2030, India’s GDP will reach $7.3 trillion, with consumption contributing a substantial 60% to the economy.

This positions India as a global consumption powerhouse, driven by the expanding middle class. By 2030, the number of Indians earning over $10,000 annually expect to triple, from 60 million in 2024 to 165 million, further fueling consumer demand.

Shifting Consumer Landscape And Opportunities For Brands

Anand Ramanathan, Partner and Consumer Industry Leader at Deloitte India, highlighted the ongoing transformation of India’s consumer landscape.

He attributed this shift to rising discretionary spending, the growth of digital commerce, and increased access to credit. Ramanathan emphasized that these trends are unlocking new opportunities across sectors, urging businesses to adapt to the evolving consumer expectations.

Also Read: India’s Growth Model Can Serve As A Template For Other Nations: CEA Nageswaran

Companies must offer affordability, convenience, sustainability, and personalized experiences to succeed in this dynamic market.

Discretionary Spending Entering A New Growth Phase

Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), pointed out that India’s discretionary spending is entering a new growth phase, driven by higher incomes, digital adoption, and changing consumer preferences.

The report further provides a roadmap for brands to effectively tap into these changes and engage with India’s increasingly aspirational consumer base.

Key Drivers Of India’s Consumer Boom

Several key factors are contributing to the expansion of India’s consumer market:

• Premiumisation and Evolving Preferences: Rising affluence is prompting consumers to prioritize quality, convenience, and experiences over price. Gen Z and millennials, who make up 52% of India’s population, are leading the demand for premium and sustainable products.
• Digital and Financial Inclusion: Expanding access to credit, with credit card penetration expected to triple by 2030, is driving consumer spending. Additionally, digital payment systems and fintech solutions, such as UPI, are reshaping how consumers engage with brands and accelerating the growth of e-commerce.
• Shift in Household Spending Patterns: As disposable incomes rise, spending on essentials like food has decreased, while discretionary spending on dining out, travel, wellness, fashion, fitness, and home improvement has increased, reflecting a shift in household priorities.
• Rise of Organised Retail and Experience-led Consumption: The organised retail sector is expanding at a 10% compound annual growth rate (CAGR) and is projected to reach $230 billion by 2030. Consumers are increasingly gravitating toward omnichannel shopping and experience-driven retail, compelling brands to adjust their engagement strategies to cater to these preferences.

Conclusion: India’s Consumer Market Holds Tremendous Potential

India’s consumer market is further undergoing a profound transformation, driven by rising incomes, changing preferences, and the growth of digital and financial inclusion.

Brands looking further to succeed in India’s dynamic market must embrace these changes and adapt their strategies to meet the expectations of the modern Indian consumer.