India Set To Become Global Consumption Hub, Report Reveals

A recent report reveals India is poised to emerge as the world’s leading consumption hub surpassing major economies. Current consumption constitutes 56 per cent of India’s GDP and is expanding at the fastest pace globally. A study by Angel One and Iconic Asset predicts India's consumption levels are all set to double by 2034.

One of the primary factors driving this surge is the rise in nuclear families. Household growth is outstripping population expansion, leading to increased consumer spending. Additionally, India's growing workforce is expected to further accelerate economic activity.

The report also underscores India's robust savings potential. Between 1997 and 2023, total savings in the country reached 12 trillion Dollars. This figure is projected to rise tenfold to 103 trillion Dollars by 2047, creating vast opportunities for higher expenditure and economic progress.

Recent tax cuts announced in the Union Budget are expected to contribute to this consumption boom. The report estimates that these reductions will release Rs 1 lakh crore, which could generate an additional Rs 3.3 lakh crore in spending, potentially increasing India’s GDP by 1 per cent.

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Following a global trend, India is expected to witness a faster rise in discretionary spending—on products such as electronics, apparel, jewellery, and experiences—compared to essential spending. The report highlights that the US and China experienced similar trends during economic expansion, and India is likely to follow suit.

Despite the rise of modern retail, small neighbourhood Kirana stores still dominate 92 per cent of India’s retail trade. This presents a significant opportunity for organized retail to expand and capture a larger market share.

The report also highlights the role of India's young population in driving consumption. India has a larger Gen Z population than the entire United States, and every second rupee spent in the country will be attributed to a Gen Zer, fueling further economic growth by 2035.