India is set to become the third-largest consumer market behind only the US and China and consumer spending in India is expected to grow from USD 1.5 trillion at present to nearly USD 6 trillion by 2030, as per a World Economic Forum report that released on January 9, 2019.
The report titled 'Future of Consumption in Fast-Growth Consumer Market – India' noted that growth of the middle class will lift nearly 25 million households out of poverty in India.
Report: Key Highlights
• According to the World Economic Forum (WEF), with an annual GDP growth rate of 7.5 per cent, India is currently the world's sixth-largest economy.
• As per the report, growth in income will transform India from a "bottom of the pyramid economy" to a middle class-led one.
• By 2030, domestic private consumption, which accounts for 60 per cent of the country's GDP, is expected to develop into a USD 6-trillion growth opportunity.
• The report stated that if realised, this would make India's consumer market the third-largest in the world, behind the US and China.
• The future consumption growth is expected to come from rich and densely populated cities and the thousands of developed rural towns.
• The report stated that India's top 40 cities will form a USD 1.5 trillion opportunity by 2030, many thousands of small urban towns will also drive an equally large spend in aggregate.
• In parallel, it noted that there will be an opportunity to unlock nearly USD 1.2 trillion of spending in developed rural areas by improving infrastructure and providing access to organised and online retail.
To become the third largest consumer market, India will need to address critical societal challenges notwithstanding the significant growth in consumption including skills development and employment of the future workforce, socio-economic inclusion of rural India and creating a healthy and sustainable future for its citizens.
The private and public-sector leaders will also have to take shared accountability to ensure such consumption is inclusive and responsible.
The report identified three critical societal challenges that need to be addressed to ensure equitable growth:
• Skill development and employment for the future workforce
• Socio-economic inclusion of rural India
• Healthy and sustainable future
The report was produced in collaboration with Bain & Company.
It builds on consumer surveys conducted across 5,100 households in 30 cities and towns in India and draws from more than 40 interviews with private and public-sector leaders.