India’s consumer market is set to become the second largest in the world within the next five years, jumping from $2.4 trillion to roughly $4.3 trillion by 2030. Among this, as the country’s consumer patterns evolve, discretionary products are likely to drive higher growth momentum. Industry players are hopeful for continued measures to boost consumption in the upcoming Budget.
Experts have noted that urbanisation and digitisation are transforming buying behaviours, with e-commerce and digital payments driving consumption. “The shift from unbranded to branded products and unorganized to organized retail is expected to unlock Rs 51,95,400 crore or $600 billion in consumer spending,” said Indian Brand Equity Foundation.
Big Trends
- GST rationalisation over the past year has helped improve affordability across key consumer categories, supporting a gradual recovery in consumption.
- Rural consumption has remained resilient despite inflationary pressures.
- Simplification of tax structures and expectations around GST 2.0 are shaping sentiment across the consumer and retail ecosystem.
Major Issues / Challenges
- Rural demand remains vulnerable to monsoon risks and food inflation, requiring continued policy support, while urban demand has continued to lag for the past few quarters.
- Inverted duty structures and compliance complexity continue to add to supply chain costs for consumer companies.
- Export competitiveness remains constrained in the absence of fewer Free Trade Agreements.
What Happened in the Last Year
- GST rationalisation in 2025 helped boost consumption by improving affordability and simplifying taxation across several consumer categories.
- Consumption trends stabilised, with urban markets recovering and rural demand holding up despite cost pressures.
- Policy groundwork was laid for GST 2.0, with an emphasis on rate rationalisation and technology-led compliance.
What the Industry Expects from this Budget
- Further reforms under GST 2.0, including smoother implementation through clear circulars and faster refunds.
- Targeted measures to boost consumption, particularly in rural markets. Parag Milk Foods noted, “Boosting consumption remains an important ask from the consumer sector.”
- Greater focus on export competitiveness through expanded FTAs. CCL Products said the sector sees an opportunity to “strengthen India’s export competitiveness through the development of more Free Trade Agreements.”
