Resurgent Retail - Powered by Rising Domestic Consumption

Cushman & Wakefield

DRIVERS OF RETAIL RESURGENCE The world’s fastest growing economy is soon forecasted to touch USD 5.0 trillion in size, thereby becoming the third largest economy in the world by 2027. That’s a significant USD 1.2 trillion leap from the USD 3.9 trillion economy that India is estimated (2023F, IMF) to be today. In the past, it took India over seven years (2017-23F, IMF) to achieve that sort of growth in economic size.

Domestic Consumption on the Rise

This journey towards becoming 5 trillion economy is going to be filled with opportunities of growth across multiple sectors, particularly in consumption-oriented sectors such as Retail. India’s per-capita GDP (or income) is estimated to rise sharply during these forecasted period, with some leading market analysts indicating at USD 4,000 level in next six years until 2030.

Forecasted USD 5.0 trillion economy to hurl India closer to upper middle-income economy

6.0

4,000

3,500

5.0

3,000

4.0

2,500

3.0

2,000

1,500

2.0

1,000

GDP per-capita (USD)

1.0

500

- GDP, in trillion dollars (curr. prices)

0

2022f

2023f

2024f

2025f

2026f

2027f

2020

2021

2012

2013

2014

2015

2016

2017

2018

2019

GDP per capita, Current Prices

GDP (in trilions), Current Prices

Source: IMF WEO October 2022 database

At USD 4,000, India’s per-capita income is expected to come within reasonable distance from where the upper-middle income nations start (USD 4466, onwards), as per income levels defined by the World Bank. The foreseeable journey of India becoming a middle-income country over the next few years is exciting for the retail real estate segment, as higher disposable incomes would entail higher spends on discretionary items and customer experiences, an area excelled by physical retailing formats.

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