Indian retail is close to its destined orbit and what it needs now is an initial push of momentum to get there, says Badri Beriwal, Chief Strategy Officer and Chief Business Development Officer, Bata India
India’s growth story is structurally strong. GDP growth continues to outpace most large economies, incomes are rising, and long-term consumption fundamentals remain intact. At a macro level, India is, and will remain, a consumption-driven economy and over time, consumption will inevitably grow.
Hence, the question to ask before Budget 2026 is how quickly this growth can be accelerated.
Over the past few years, consumption momentum has been uneven. The post-Covid period saw household spending becoming cautious, even as aspirations stayed high. Inflationary pressures and global uncertainty weighed on discretionary demand.
Today, however, the patterns are shifting. Disposable incomes are beginning to rise, balance sheets are improving, and multiple policy interventions are aligning to put more money back in consumers’ hands. Retail now looks to Budget 2026 as a moment to reignite the animal spirits of consumption.
The government has already taken several meaningful steps in this direction. Income tax reforms, rationalisation under the GST framework, and ongoing discussions around family taxation are structural measures that directly support household spending power. These are not short-term stimulus tools, but long-term reforms that in turn in create the foundation for sustained consumption growth. As disposable incomes rise, consumption will need to catch up, and retail will be among the first sectors to reflect that shift.
Consumption Catching Up With Aspiration
India remains one of the fastest-growing retail markets globally. Organised retail is expected to reach nearly USD 230 billion by 2030, while ecommerce could scale to between USD 350 billion and USD 550 billion by 2035. These projections are not just about scale, but about depth. They reflect a gradual broadening of consumption across categories, price points, and geographies.
As economic confidence improves, discretionary spending is expected to rise. This will also create space for premiumisation and the expansion of higher-value segments. The increasing presence of global and luxury brands in India is an early indicator of this trend. As consumption deepens, Indian retail will increasingly resemble other large consumption-led economies.
While public capital expenditure has played a critical role in sustaining economic momentum, the next phase of consumption growth will depend on a stronger pickup in private investment. With recent trade agreements opening markets and improving supply chain integration, investment confidence is beginning to strengthen. As private investment accelerates, manufacturing capacity expands, employment rises, and income generation broadens. This virtuous cycle feeds directly into consumption and supports more durable retail growth.
Domestic manufacturing and consumption are closely linked in this cycle. Strong local production capabilities improve supply resilience, create jobs, and support income-led demand growth. As manufacturing and services investment picks up, consumption follows, reinforcing India’s position as both a large consumer market and a competitive economic ecosystem.
Setting The Trajectory For Consumption-led Growth
Budget 2026 therefore has the opportunity to set the trajectory for the next phase of India’s retail growth by reinforcing reform-led momentum rather than short-term relief. With rising incomes, tax reforms already in place, and improving private investment sentiment, the foundations for a consumption upswing are visible.
Indian retail is close to its destined orbit. What it needs now is an initial push of momentum to get there. If Budget 2026 provides that inertia through policy continuity and investment confidence, retail can act as a catapult, accelerating India into its next phase of consumption-led growth and helping it catch up with other major global economies.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.
