India’s retail sector, currently valued at $1.06 trillion, is projected to nearly double to $1.93 trillion by 2030, according to a Deloitte-Ficci report. Online retail is expected to grow from $75 billion in 2024 to $260 billion by 2030, doubling its share of total retail from 7% to 14%.
“The next wave of growth will be driven less by distribution expansion and more by the ability of FMCG, retail, and e-commerce players to anticipate and respond to shifting consumer behaviours, regional nuances, and the demand for purpose-led innovation,” Anand Ramanathan, partner & consumer industry leader, Deloitte South Asia, said.
Gen Z leads again
Gen Z — known for their digital fluency and fast-evolving preferences — have emerged as a dominant consumer group. In 2025, their direct spending is projected to reach $250 billion. In fashion alone, they drive close to half the category’s consumption, while also leading spending in personal care and footwear. Their collective spending power constitutes 43% of the country’s total consumption.
“Smaller players and new-age D2C brands are ahead in adopting these trends, scaling rapidly through e-commerce and quick commerce. They are reshaping competition by responding faster to evolving consumer preferences, especially among younger cohorts,” the authors of the report noted.
Quick commerce, a service that is now available in more than 80 cities and towns, is expanding at an annual pace of 70-80%, making India the world’s fastest-growing market in this segment. “In certain micro-markets, players are already demonstrating positive unit economics, suggesting the model is maturing beyond pure cash burn,” Somdutta Singh, founder & CEO, Assiduus Global, said.
Tier II and III cities are emerging as growth engines, now contributing over 60% of all e-commerce transactions in the country. Retail space absorption in 2024 was led by Bengaluru and Hyderabad, underscoring the shift beyond metros. “On one hand, this democratises consumption, expands the customer base, and compels retailers to invest in omni-channel models, hyperlocal logistics, and vernacular engagement. On the other hand, challenges around last-mile delivery, digital literacy, and uneven infrastructure persist,” Yasin Hamidani, director, Media Care Brand Solutions, observed.
Consumption patterns are shifting towards premium products, sustainability, and “Made-in-India” brands, the report states, with over 60% of consumers favouring domestic labels across food, beverages, 55% across home décor, and 53% across personal care.
The report adds that tariff realignments and free trade agreements are strengthening India’s competitiveness in exports while the domestic market remains a strong buffer against global volatility.
The report identifies six consumer demand trends shaping the sector: digital-first consumption, Gen Z-led premiumisation, growing preference for Indian brands, omni-channel growth, the rise of quick commerce, and sustainability-driven choices.
The retail sector contributes over 10% to the country’s gross domestic product (GDP) and employs about 8% of the workforce.
Retailers, brands seek ease of doing business
The government on Wednesday reiterated its commitment to ease of doing business and deregulation. “In many cases, a single clause in an Act can translate into a lengthy checklist of compliance requirements. We want to identify these provisions to ease this burden,” Himani Pande, additional secretary in the department for promotion of industry and internal trade (DPIIT), said. She was speaking at a panel discussion at Ficci’s Massmerize event.
Lalit Agarwal, MD of V-Mart, highlighted the complexities of operating across 23 states, where disparate municipal and panchayat laws create significant hurdles for retailers. He lauded the FSSAI’s successful centralisation model and called for more such single-window portals to reduce the “pain” of obtaining licenses and speed up store openings. Ankur Goel, co-founder & CEO, Epigamia, pointed out that GST interpretation can differ at the state level, creating ambiguity for new and emerging product categories like almond milk and probiotic drinks. He also proposed quarterly GST filings to ease the burden on businesses.
Pande said a one-time, lifetime licence for certain businesses is being explored. Efforts are also underway for a system where fire NOCs can be issued by certified third parties.