The Indian retail market is projected to reach $1.75 tn by 2026
India: the top retail destination
The retail market in India has undergone a great transformation and has witnessed tremendous growth over the past 10 years. The overall retail market is set to cross the $1.75 tn mark by 2026 from $795 billion in 2017. India's e-commerce market will also grow at a 30% COMPOUND annual rate so that the gross value of merchandise is worth $200 billion by 2026.
India is among the best countries to invest in commercial space. Factors that make India so attractive include the world's second-largest population, a middle class of 600 million people, increasing urbanization, rising household incomes, connected rural consumers, and rising consumer spending.
- India ranked second in the Global Retail Development Index (GRDI) in 2019.
- Retail is India's largest industry, currently accounting for more than 10% of the country's GDP and 8% of total employment.
Recent policy changes allow for 100% FDI under the automatic route for single-brand retail.
The retail industry in India has experienced healthy growth in recent years, reaching a total market size of $795 billion in 2017.
India's retail market is estimated to reach $1.75 tn by 2026, from $0.79 tn in 2018, growing at a CAGR of 9-11%, driven by sociodemographic and economic factors such as urbanization, income growth and the rise of nuclear families. On the other hand, the Indian e-commerce industry is expected to cross the $200 billion mark by 2026.
The e-commerce market in India will also grow at a 30% COMPOUND annual rate for the gross value of merchandise to reach $200 billion by 2026, and have a market penetration of 12% compared to 2% today.
India is largely a disorganized retail market, contributing to 88% of the total retail sector in India. The organized retail market is currently valued at $60 billion, while the un organized market has the rest. Organized retail market share is projected to increase to 22-25% by 2021, thereby reducing the share of the un organized retail market to 77%. The organized retail market, therefore, has the potential to reach approximately $140-160 billion.
