The report says that rising purchasing power, including Gen Z’s direct spending capacity, is fuelling brand confidence to scale internationally
Propelled by robust domestic consumption alongside a surge in digital adoption and premiumisation, India’s retail sector, valued at USD 1.06 trillion in 2024, is projected to nearly double to USD 1.93 trillion by 2030 at a 10 per cent compounded annual growth rate (CAGR), as per a report by Deloitte and Federation of Indian Chambers of Commerce and Industry (Ficci).
Evolving Free Trade Agreements (FTAs) and tariff realignments are further enhancing India’s export competitiveness, allowing ‘Made in India’ products to reach new markets with reduced barriers and cost advantages, the report pointed out.
The report emphasised that rising purchasing power, including Gen Z’s direct spending capacity of USD 250 billion, is not only sustaining domestic demand but also fuelling brand confidence to scale internationally. This convergence of domestic resilience and improved global market access positions India as both a consumption powerhouse and a formidable export base, it said.
“India’s consumer ecosystem is entering a defining decade, fuelled by a young, digitally fluent population, an expanding middle class and the rising economic influence of Tier II and III cities, which now account for over 60 per cent of ecommerce transactions. The next wave of growth will be driven less by distribution expansion and more by the ability of FMCG, retail, and ecommerce players to anticipate and respond to shifting consumer behaviours, regional nuances and the demand for purpose-led innovation,” highlighted Anand Ramanathan, Partner & Consumer Industry Leader, Deloitte South Asia.
Key Consumer Demand Trends
The report noted that digital-first consumption is gaining ground. Online marketplaces now influence 73 per cent of purchase decisions, with YouTube reviews (40 per cent) and peer recommendations (51 per cent) emerging as trusted alternatives to traditional influencer marketing.
India’s D2C market crossed USD 80 billion in 2024 and is on track to exceed USD 100 billion in 2025, redefining how brands scale and connect with consumers. Deloitte-Ficci report added that Gen Z now fuels aspirational premiumisation and is set to account for 43 per cent of total consumption in 2025 with a direct spending power of USD 250 billion. The preference for locally-made products is strengthening, with 68 per cent of consumers favouring Indian brands in Food & Beverages (F&B), 55 per cent in home décor and 53 per cent in personal care, the report added.
Over 60 per cent of ecommerce transactions now originate from Tier II and III cities, signalling a retail shift beyond metros. The report explained that India is the world’s first scaled quick commerce market, operating in over 80 cities and growing at 70 to 80 per cent CAGR. More than 60 per cent of Gen Z and millennials prefer brands with transparent sustainability practices.
The report mentioned that while challenges such as global demand uncertainty, supply chain pressures and talent upskilling persist, the sector’s long-term outlook remains strong precisely because of this domestic demand resilience.
