India’s Rise in Consumer Market

According to a report by BMI, India’s consumer market is poised to become the world’s third largest by 2027. Currently ranking fifth, the country is expected to experience a 29% increase in real household spending, propelling it up two spots in the global ranking.

In fact, the report predicts that India’s household spending per capita will outpace that of other developing Asian economies like Indonesia, the Philippines, and Thailand, with a year-on-year growth rate of 7.8%.

“Overall, the gap between total household spending across ASEAN and India will also almost triple,” states the report.

By 2027, BMI estimates that India’s household spending will exceed $3 trillion, thanks to a compounded annual growth rate of 14.6% in disposable income. Furthermore, a projected 25.8% of Indian households will reach an annual disposable income of $10,000.

“The majority of these households will be located in the economic centers, such as New Delhi, Mumbai, and Bengaluru. The wealthier households are mainly located in urban areas, making it easy for retailers to target their key markets,” BMI explains.

India’s large youth population also plays a significant role in increasing consumer spending. Approximately 33% of the country’s population falls within the age range of 20 to 33 years old, and BMI expects this group to drive the demand for electronics.

The report predicts that communications spending will grow by an average of 11.1% annually, reaching $76.2 billion by 2027. This is attributed to a “technology-literate, urban middle class with increasing amounts of disposable income that would encourage expenditure on aspirational products such as consumer electronics.”

India’s ongoing urbanization is also expected to boost consumer spending, as it allows companies to access consumers more easily and open physical retail stores to cater to their needs. In April, Apple opened two retail stores in Delhi and Mumbai, while Samsung announced plans to establish 15 premium experience stores across India by the end of the year in cities like Delhi, Mumbai, and Chennai.

BMI also highlighted that global investors such as Blackstone Group and APG Asset Management have injected more funds into India’s shopping mall business, capitalizing on the growth in consumer spending.