India’s Retail Market To More Than Double To INR 210–215 Trillion By 2035 From ~INR 90–95 Trillion In 2025.

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Mumbai, Maharashtra, 16th of February, 2026 : India’s Retail Market to More Than Double to INR 210–215 Trillion by 2035 from ~INR 90–95 Trillion in 2025

· The report examines the key trends reshaping Indian retail, structural changes influencing its future prospects and the strategic choices faced by retailers

· India continues to be one of the fastest growing economies in the world with a GDP growth of 8% in 2025, supported by a strong consumption momentum, and well on track to reach a retail market size of ₹200 Trillion over the next decade

· Consumer choice is becoming increasingly complex and context-driven across different segments, missions and expectations with a greater demand for convenience & differentiation

· Technology, especially AI, is transforming how consumers shop with AI-guided discovery and more digital transactions – Nearly 42% of US urban consumers have already used GenAI

· With India’s internet adoption levels growing more than 3x from 2016 levels, and high adoption elasticity for digital technologies, AI-led commerce is an emerging reality for India, poised to scale rapidly

· AI is transforming core retail functions, delivering major gains in speed, quality and cost. Functional AI transformation can unlock efficiency gains of 40-60% versus 10-15% from a use-case driven approach

· A successful AI transformation requires strong focus on organization and operating model – Nearly 70% of value generated stems from internal skills and capabilities, process re-design and effective change management

· Against these dynamic shifts, retailers must sharpen focus and adapt their strategies and offerings to cater to the evolving consumer journeys

· The report outlines the key considerations for retailers, emphasizing the need to target focused consumer cohorts with deliberate trade-offs & relentless execution, embed AI across the shopper journey, and reimagine the talent & operating model to remain competitive and win as we enter the next decade of retail growth

Mumbai, February 16, 2026: Boston Consulting Group (BCG) and the Retailers Association of India (RAI) today unveiled their joint report, Winning Codes for Retail 2035: Capturing the ₹200 Trillion Prize, at the Retail Leadership Summit 2026.

The report highlights India’s consumption-led growth momentum, the rapidly evolving consumer journey, and the strategic imperatives for retailers seeking sustained competitive advantage. India continues to rank among the fastest-growing major economies globally and is projected to become the world’s third-largest economy by 2030. The Indian retail market is expected to expand to ₹200 trillion over the next decade, presenting a significant opportunity for value creation.

The findings underscore the increasingly complex and context-driven nature of consumer decision-making, alongside the growing influence of technology, especially artificial intelligence, in shaping every stage of the shopper journey. The report calls on retailers to reassess traditional assumptions, deliver sharply differentiated value propositions, and embrace AI as a catalyst to fundamentally redesign the retail organization.

Key Findings of the Report

Retail in India remains an exciting opportunity

· India continues to outperform major global economies, with GDP growth of 8% in 2025, and remains on track to become the world’s third-largest economy by 2030.

· Private consumption remains a key driver of this momentum, led by discretionary and services spending. Together, these forces are expected to expand the Indian retail market to nearly ₹200 trillion over the next decade.

· Organized retail has historically outpaced underlying category growth. However, this gap has recently narrowed, particularly in offline channels, signaling the need for sharper differentiation and operating model evolution.

Winning codes for retailers in the next phase of retail

Target focus segments with sharp trade-offs to deliver on CVP profitably

· Winning retailers anchor their strategy and business decisions around a clearly defined target cohort

· Explicit trade-offs and disciplined execution are critical to delivering a differentiated customer value proposition and sustaining profitable growth.

Re-think marketing & shopping experiences to cater to evolving shopper journeys

· Agentic commerce has moved from experimentation to reality, with GenAI increasingly influencing research and purchase decisions. Nearly 42% of urban US consumers have already used GenAI.

· In line with India’s strong digital adoption trajectory, AI adoption across the shopping journey is expected to accelerate in urban India, led by Gen Z consumers.

Drive end-to-end AI-led functional transformation and capability reset

· AI is transforming core retail functions, delivering meaningful improvements in speed, quality, and cost.

· A functional transformation approach can unlock gains of 40 to 60%, compared with 10 to 15% typically achieved through isolated use-case deployments.

Imperatives for Retailers

To succeed in India’s complex retail landscape, retailers must:

· Define clear focus segments, make deliberate trade-offs, and align business decisions to deliver a distinct core value proposition.

· Leverage AI across the shopper journey to enhance personalization, improve conversion, and reimagine marketing and shopping experiences.

· Drive an end-to-end, function-led AI transformation across the organization to unlock sustained value creation

As India’s retail sector enters its next phase of growth, success will favor those who combine clarity of focus with disciplined execution and AI-led transformation. Retailers that embrace structural change across consumer engagement, operating models, and talent will be best positioned to capture disproportionate value in the journey toward a ₹200 trillion retail market.

Industry Perspectives:

“India’s retail story is an inspiring story – the sector is poised to expand into a nearly ₹200 trillion opportunity over the next decade. More importantly – both the offline and online operating cash flows are showing clear and sharp improvement. The winners of the future will have sharp differentiated value proposition, at scale use of AI and technology and excellent execution”, said Abheek Singhi, Managing Director & Senior Partner, BCG.

“Retail is entering a decisive new phase where AI is no longer a peripheral experiment but a core driver of competitive advantage. Agentic commerce is already influencing how consumers discover, evaluate, and purchase products globally. Given India’s strong digital adoption curve, we expect AI-led shopping journeys to accelerate rapidly in urban India, particularly among Gen Z consumers. The bigger opportunity, however, lies beyond front-end experiences. Retailers that adopt an end-to-end AI-led functional transformation approach—across merchandising, supply chain, marketing, and service can unlock 40–60% performance gains, far exceeding the incremental impact of isolated use cases. To win in India’s complex retail landscape, companies must make deliberate strategic choices: define clear focus segments, align decisions around a distinctive core value proposition, and embed AI across the shopper journey to drive personalization, improve conversion, and reimagine the overall shopping experience.”, added Bharat Mimani, Managing Director & Partner, BCG.

“India’s retail industry enters 2026 with three parallel realities: demand remains resilient, consumers are becoming more discerning, and retailers are innovating. The next decade’s ₹200 trillion 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 with sustained operational excellence. The winners of the next decade will be those who treat transformation as a discipline rather than a project, and who build trust by delivering consistently across formats, channels, and price points,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI).

About the Report

This report serves as a comprehensive playbook for Indian retailers, offering in-depth insights into the themes shaping the next phase of retail evolution and practical actions to drive sustainable growth. As India advances toward a ₹200 trillion-plus retail economy over the next decade, retailers that proactively embrace strategic trade-offs and AI transformation at scale will be best positioned to capture a disproportionate share of the opportunity.

About Boston Consulting Group

Boston Consulting Group (BCG) partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. Founded in 1963, BCG pioneered business strategy consulting and continues to drive transformation for organizations worldwide. For more information, please visit https://www.bcg.com.

About Retailers Association of India

Retailers Association of India (RAI) is the unified voice of Indian retailers. RAI works with stakeholders to foster retail industry growth, advocate for industry-friendly policies, and drive employment and investment opportunities. For more information, please visit https://rai.net.in.