India’s Retail Sector Set To Accelerate To 9–10% Growth: RAI

India’s $900 billion retail sector, currently growing at 5%, is on the verge of accelerating to a 9–10% growth rate, according to the Retailers’ Association of India (RAI).

The industry attributes this optimistic outlook to a growing consumer base and rising disposable incomes.

“Immediately after the pandemic, retail experienced a 20% growth. Over the last year, that slowed to 5%, but we now expect growth to rebound to 9–10%,” said RAI CEO Kumar Rajagopalan in an interview with The Hindu.

Consumer base and incomes are driving growth

RAI observed that emerging trends point to increased consumption, backed by favourable demographics and economic indicators.

“The country is moving toward becoming the third-largest economy. As per capita income rises, so does consumption,” Rajagopalan noted.

He emphasised that India has both the population and the economic trajectory to sustain long-term growth in the retail sector.

India’s retail industry is rapidly formalising. A decade ago, only 4–5% of retail was organised. Today, organised retail constitutes 17% of the industry.

Rajagopalan highlighted that several traditional businesses are becoming formal as newer generations assume control.

Additionally, e-commerce has accelerated this transformation.

He credited government reforms—like GST implementation and the promotion of digital payments—for supporting this shift.

“These measures have streamlined operations and encouraged retailers to become more organised,” he said.

Omnichannel retail redefining the landscape

Rajagopalan pointed out that the sector is undergoing fundamental changes as omnichannel retailing gains ground. Customers now shop both online and offline, prompting businesses to adapt quickly.

“The competitive landscape has changed dramatically. Barriers to entry are nearly gone, and the fight for customer attention has intensified,” he stated.

Retailers now face the challenge of crafting engaging, clear, and appealing messages to attract and retain distracted, fast-moving consumers.

With increasing competition and low entry barriers, businesses are rethinking their strategies.

Rajagopalan stressed that modern consumers are harder to engage as they are bombarded with countless distractions.

“There’s a battle for a share of customers’ time. All businesses face it, but it’s especially pronounced in retail. The industry needs to make its messaging more compelling,” he said.

While the retail sector employs over 40 million people, making it the second-largest employer after agriculture, Rajagopalan identified talent retention and development as pressing concerns.

“The industry has a large workforce, but finding and retaining quality talent is a significant challenge,” he admitted.

Training and upskilling remain crucial for sustained growth.

Outlook: Stronger, smarter retail ahead

With rising incomes, a young population, and a digitally connected market, India’s retail sector stands ready to scale new heights.

Organised retail, tech adoption, and policy support are creating a fertile ground for accelerated growth.

As the industry continues to adapt to consumer expectations and market shifts, RAI remains optimistic that India’s retail sector will soon enter a new phase of robust and sustained expansion.

Also Read: India’s Manufacturing Poised For Growth: Cushman & Wakefield