India’s retail industry to grow 10% a year, reach $2 trn by 2032, report says

As India recovers from Covid-19, the retail industry has resumed its growth trajectory and is likely to see 10% annual growth to reach approximately $2 trillion by 2032, according to a BCG-RAI report.

The report, titled "Racing towards the next wave of Retail in India", while certain industry segments like food and grocery, restaurants and Quick service restaurant (QSR), and consumer durables have recovered to pre-COVID levels, others like jewellery and accessory, apparel, and footwear remain on track to a full recovery.

BCG Managing Director and Senior Partner Abheek Singhi said, "The Indian economy continues to be driven by consumption and we are observing that consumption growth is back in the positive territory after the two-year COVID pause."

Pointing out that the country's retail industry will grow to approx $2 trillion in the next 10 years, Singhi added, "the next decade will see organised retailers focus on footprint expansion, across all formats - offline and online - to fuel future growth".

The report says that India's consumption, which was growing at approximately 12% pre-pandemic, went into negative territory during the pandemic but has now recovered to surpass pre-pandemic growth levels at 17%.

E-commerce in India will likely reach $130 billion by 2026, as compared to $45 billion in 2021, as per a report.

"The rising competition and the need for constantly improving the customer value proposition is driving the rise of ecosystems – and the customers are approached by players across retail and non-retail. We are seeing examples of this trend already in India and is expected to significantly transform the entire landscape in the future," added Rachit Mathur, Managing Director and Partner, Consumer & Retail Practice, BCG.

The report is an in-depth study of retail players in the country, identifying challenges in the prevailing environment and highlighting emerging trends and models that can potentially shape the future of retail.

Shoppers Stop managing director and CEO Venu Nair said that the retail industry is likely to witness low double-digit growth this fiscal, as footfalls into offline stores are back on track and are likely to get further momentum amid easing of pandemic-related restrictions.

"Overall the footfalls have come back to the pre-COVID levels and are strong since the last 2 months and we expect it to continue. We are expecting the industry to witness lower double-digit growth or high single-digit growth this financial year," Nair told news agency PTI on the sidelines of Retail Leadership Summit.