Retail Sector: India Shines Amid Global Slowdown, New Momentum Driving Growth

New Delhi: While retail markets in the United States and other Western countries are facing headwinds, India’s retail sector is witnessing a remarkable resurgence. According to real estate consultancy firm Anarock, the Indian retail market has received a fresh boost, attracting significant investments and global interest.

Since 2020, nearly 1,200 mall stores in the U.S. have shut down. The rising number of vacant malls has led to nearly 40% being repurposed or redeveloped for other uses. In contrast, India’s retail sector is thriving, driven by strong consumer demand and growing investor confidence.

Investment Surge in Indian Malls
Anarock Group CEO, Anuj Kejriwal, stated that over the next three years, Indian shopping malls are expected to attract more than USD 3.5 billion in investment. He added that over 88 international brands have already entered the Indian retail market and are rapidly expanding. Many more global brands are in the pipeline, seeking space in existing Grade-A properties, which remain limited.

Why India’s Retail Sector is Flourishing
India’s young population and relatively low competition in organized retail are key factors behind its appeal. Anarock highlighted that organized retail supply in India remains limited. Compared to countries like the U.S. and China, India has the lowest per capita retail stock. Coupled with nearly double the per capita income growth over the past decade, this has created a unique supply-demand gap not seen elsewhere in the world.

Malls Operating at Full Capacity
Premium malls in India are operating at nearly full capacity, with occupancy rates ranging between 95–100%. Rents have surpassed pre-pandemic levels, and developers now see leasing cycles outpacing construction cycles. Moreover, Indian malls have evolved beyond shopping centers to become lifestyle destinations serving multiple purposes.

Footfall and Consumer Behavior
Daily footfall in Indian malls exceeds 20,000 visitors, surging to over 40,000 on weekends. Entertainment, dining, and social interactions remain the primary attractions, contributing 30–35% of total foot traffic.

E-commerce and Physical Retail Coexistence
Despite the growing influence of e-commerce, physical retail in India remains robust. Online retail accounts for only around 8% of the market, significantly lower than 20%+ penetration in the U.S. and China. This allows brick-and-mortar stores to operate synergistically with digital channels and even leverage them for growth.

Looking Ahead
Anarock predicts that India is on track to become a $6 trillion consumption economy by 2030, reinforcing its position as a prime growth market for international retailers and long-term investors.