According to the latest report of Deloitte-RAI, India’s private consumption surged to a whopping $2.1 trillion in 2024. India’s private consumption growth rate, which was recorded at 7.2% during the year, has left all major global economies behind. Even the largest, most significant economies such as China, Germany, and the US are far behind India when it comes to private consumption.
This massive surge in the private consumption indicates towards the shifting economic landscape of the country. This fundamental shift also directs towards the growing per capita income of the nation, which has already surpassed $2000 in FY25.
Key Highlights of the Report
- India’s Private Consumption in 2024 stood at $2.1 trillion
- India’s GDP is anticipated to be around $7.3 trillion by 2030
- Consumption will be contributing to 60% of the economy, making India a global consumption powerhouse
- The number of Indians having an income of $10000 yearly is currently around 60 million and by 2030 the number is expected to triple and reach 165 million.
- The per capita income is expected to even surpass the $4000 level by 2030.
Factors driving this Private Consumption Growth
Here are the factors which made this massive surge in the private consumption a reality –
- The preferences of the new age consumers are evolving, affluence has been playing a major role in the same. As you saw above, the per capita income has grown to a significant level, which is helping the middle class to consume more. The consumers are now preferring quality, experiences, convenience, over the price, and this is what is pushing the private consumption upward. Out of all consumers, 52% are millennials and Gen Z who are demanding premium products which are sustainable at the same time, and they are ready to pay for the same.
- The next factor has to be financial inclusion and digitalization. With the increase in easily accessible credit, which has penetrated deep into the economy, consumer spending has shot up drastically. The use of UPI, and other fintech services, digital payment methods have increased consumer spending significantly. These are also defining the choices and preferences of the consumers.
- The household spending patterns have evolved as well. Now most of the households have multiple earning members, which has risen the household income and thus the spending as well. Dining out, shopping, and traveling have become way too common for the middle class, which were earlier very occasional. All these have been leading to a rise in consumer spending.
- Growth of organized retail sector is another factor driving the private consumption in India. The organized retail sector is currently growing at 10% CAGR and by 2030 it is projected to reach $230 billion. This is changing how consumers are shopping today; they are attracted to omnichannel shopping. The consumers are also looking for experience-driven retail shopping and brands are now thus matching up to these retail stores engagement tactics.
Wrapping up
The growth in consumer spending has been incremental for the economy as a whole as it is driving multiple sectors together. With the changing landscape of consumer spending, the overall economy is rising. India’s private consumption growth is all set to increase further and outpace global economies, with this shift in consumers’ preferences and increasing income of the consumers.
Source: CNBC TV18
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