India’s retail market to more than double to Rs 215 trillion by 2035, driven by AI and consumption surge: Report

NEW DELHI: India’s retail market is on a trajectory to more than double in size, reaching between Rs 210 trillion and Rs 215 trillion by 2035, up from Rs 90-95 trillion in 2025. This growth is being driven by a resilient economy and a sharp rise in digital adoption, according to a new joint report by Boston Consulting Group (BCG) and the Retailers Association of India (RAI).

The report, titled ‘Winning Codes for Retail 2035: Capturing the Rs 200 Trillion Prize’, was unveiled today at the Retail Leadership Summit 2026 in Mumbai. India remains one of the world’s fastest-growing economies, with a GDP growth rate of 8 per cent in 2025. This economic strength is fueling a massive consumption momentum that puts the country on track to become the third-largest economy globally by 2030.

The report highlights that as the market expands, consumer choices are becoming more complex and driven by specific contexts, with shoppers demanding both greater convenience and clear differentiation from brands. “India’s retail story is an inspiring story – the sector is poised to expand into a nearly ₹200 trillion opportunity over the next decade”, said Abheek Singhi, Managing Director and Senior Partner at BCG.

The integration of artificial intelligence is fundamentally changing the way Indians shop, moving from simple digital transactions to AI-guided discovery. The report notes that India’s internet adoption has grown more than three times since 2016, creating a high “adoption elasticity” for new technologies like Generative AI.

This has led to the rise of “agentic commerce,” where AI agents influence research and purchase decisions. “Agentic commerce is already influencing how consumers discover, evaluate, and purchase products globally,” noted Bharat Mimani, Managing Director and Partner at BCG. He added that retailers adopting end-to-end AI transformations across merchandising and supply chains can unlock performance gains of 40% to 60%, far higher than the 10% to 15% seen from isolated experiments.

For retailers to succeed in this shifting landscape, the report emphasises that they must move beyond traditional business models. Success will require defining clear consumer focus segments and making deliberate trade-offs rather than trying to appeal to everyone. This shift includes reimagining talent and operating models to support a tech-driven approach.

Kumar Rajagopalan, CEO of the Retailers Association of India (RAI), stated that the next decade’s opportunity will not be captured by sales growth alone. “It will be captured by retailers that make explicit business model choices, embed AI across the shopper journey, leverage AI to power agent-led functions, and rebuild talent and operating models,” Rajagopalan said.

Ultimately, the report concludes that the winners of the next decade will be those who treat digital transformation as a continuous discipline rather than a one-time project. As India moves toward this Rs 200 trillion milestone, retailers will need to blend disciplined execution with a deep understanding of evolving consumer journeys to remain competitive. The findings suggest that those who adapt their strategies now to incorporate AI-led commerce and personalised experiences will be best positioned to capture a disproportionate share of the market’s future value. (ANI)