Indians spent Rs 1.45 lac cr on foreign travel, Kotak shares India’s consumption data

These developments point to a household wallet that is increasingly moving toward experiences, premium categories and discretionary spending. At the same time, the report shows households carrying larger repayment obligations and lower financial savings than a few years ago, suggesting that spending patterns are changing even as financial pressure remains present.

Foreign travel has emerged as a major spending destination

The report also identified a growing outward movement of spending.

According to Kotak Mutual Fund, foreign travel became the largest outward spending category in FY26 up to February at around Rs 1,45,000 crore. Overseas investment in equity and debt expanded 7.3 times over three years.

Rather than treating international spending as a niche trend, the report presents it as another sign of changing priorities inside household budgets.

Kotak Mutual Fund noted that foreign travel dominated outward spending in FY26 and said the category recorded strong momentum following FY22–23, making it one of the most visible shifts in consumer expenditure patterns.

This clearly underlines Prime Minister Narendra Modi’s worries of Indian money going abroad when he directed Indians to forbid foreign travel for a year to keep the foreign exchanges intact.

Live events are becoming a larger part of household spending

One of the sharpest changes identified in the report comes from paid experiences.

Concert economy has seen a strong growth in the last couple of years with the number of ticketed live events increasing to 34,000 in 2025 from 19,000 in 2022. The momentum extends beyond the biggest cities. Tier two markets recorded 682% growth in live events in 2024, indicating that organised entertainment spending is spreading into newer consumer centres.

The report points to demand levels that would have seemed unusual only a few years ago. According to Kotak Mutual Fund, one major international music concert drew interest from 1.3 crore people despite only 1.5 lakh tickets being available, while three Ahmedabad shows generated Rs 322 crore in ticket sales. India’s live events industry reached Rs 20,861 crore and continued to grow at 15% year on year.

Putting these categories together, the report noted that, “Concerts, OTT, Quick Commerce, Mobiles & Hearables” are among the categories attracting a growing share of household spending, placing experiences and convenience alongside more traditional consumption categories.

Food is taking a smaller share of the budget while spending moves elsewhere

The report argues that the rise of experiences is part of a broader change in household expenditure.

According to data cited by Kotak Mutual Fund, food accounted for 46% of rural household spending in 2022–23 compared with 59% in 1999–00. In urban India, food’s share fell to 39% from 48% over the same period.

Inside food itself, cereals saw one of the biggest declines. Rural cereal spending moved to 5% in 2022–23 from 22% in 1999–00, while urban cereal expenditure declined to 4% from 12%.

At the same time, categories such as beverages and processed food, durable goods including mobiles, conveyance, rent and education increased their share of urban household expenditure.

Describing this change, Kotak Mutual Fund wrote that, “Indian household isn’t really ‘spending on food’ anymore,” adding that “the thali shrank, the wallet expanded elsewhere,” as spending increasingly moved toward categories beyond staples.

The report treats that change as one of the strongest indicators of how household priorities are being redistributed.

Premium phones shows consumers are paying differently, not necessarily buying more

India’s smartphone market provides one example. Premium phones priced above Rs 30,000 accounted for 26% of units sold in calendar year 2025 compared with 20% in calendar year 2020. During the same period, premium devices recorded a compound annual growth rate (CAGR) of 5.9%, while the mass-market segment contracted by 1.2%.

The report’s conclusion is that spending inside categories is becoming more important than overall sales numbers.

Kotak Mutual Fund wrote that, “Total Phones Sold Flat. But The Premium Share Is Exploding,” and added that the market today reflects the “Same number of phones. Very different wallets,” suggesting that consumer spending is concentrating in higher-value segments rather than rising uniformly.

The same direction appears in adjacent categories tracked in the report. Hearables recorded 52%  (CAGR) over the period referenced, paid over-the-top subscriptions expanded at 40%, and Apple India revenue grew at 47%.

Spending growth is stronger at top and financial pressure builds underneath

The report also pointed to uneven participation in this consumption pattern.

Kotak Mutual Fund estimates showed urban wealthy income pools expanded at around 18%  (CAGR) during FY20 to FY25, compared with around 6% for urban mass segments. Rural wealthy income growth stood at around 10.1% against 7.2% for rural non-agricultural labour.

The report also found that urban top 10% households spend multiples of the national average across categories, which included durable goods, jewellery, education and out-of-home food.

Summarising this pattern, Kotak Mutual Fund wrote that, “Income growth deepened. It didn’t widen,” and described the result as “Same India, two trajectories,” arguing that spending power is increasing faster among higher-income groups than across the broader population.

At the same time, household repayment obligations continued to rise. According to the report, loan repayment burdens grew faster than income growth in five of the seven years covered, while household net financial savings stood at 5.3% of gross domestic product in the first nine months of FY26 compared with 11.2% in the first nine months of FY21.

Conclusion

Kotak Mutual Fund’s central observation is that spending priorities are changing. Concert tickets, subscriptions, premium devices and overseas travel are taking a larger place in household budgets, while staples account for a smaller share than they once did.

The report’s data suggested that the competition for household spending is increasingly being decided outside the traditional shopping basket and in the choices people make about experiences, convenience and how they want to use their discretionary income.

Disclaimer: The macroeconomic observations, shifting consumption trends, and savings data discussed in this report are based on institutional research findings and do not constitute direct personal finance advice, investment recommendations, or financial advisory guidelines for retail investors. While the report highlights an increasing allocation toward experiential, premium, and discretionary spending, household balance sheets remain subject to risks from rising debt obligations, fluctuating net financial savings, and broader economic variables. Readers are strongly advised to consult a qualified financial consultant or SEBI-registered professional before making personal financial planning, borrowing, or asset allocation decisions based on these thematic insights.

This disclaimer has been generated using AI to support user well-being and responsible content consumption.