Despite global turbulence, Indian retail holds strong with 4% growth: RAI Survey
02 June, Mumbai 2025
India's retail sector continues on a steady, albeit cautious, growth path, with April 2025 marking a 4 per cent year-on-year increase in sales compared to April 2024, reveals the Retailers Association of India (RAI) latest survey. The study shows indicates in domestic demand even as global trade conditions remain turbulent.
The March 2025 report had earlier indicated a slightly higher yearly rise of 6 per cent, suggesting a dynamic but positive trend.
The overall sentiment among retailers is one of careful optimism, with consumer spending holding firm and no significant drop reported. This sustained performance underscores the inherent strength of India's consumption story, which gets a boost from a promising long-term outlook.
A February joint report by the Boston Consulting Group (BCG) and RAI had highlighted the Indian retail market will touch Rs 190 trillion by 2034. This boom is attributed to India's unique demographic advantages, including rising affluence, a vast and growing middle class, a middle-aged adult population, and increasing workforce participation by women.
Regional and sectoral highlights
The April survey by RAI reveals varied growth across different regions and retail categories.
North and West India have emerged as frontrunners in year-on-year growth, registering 6 per cent and 5 per cent increases, respectively. East and South India recorded a more modest growth of 2 per cent each.
Table: Regionwise retail growth
|
Region |
YoY Growth (April 2025 vs April 2024) |
|
North India |
6% |
|
West India |
5% |
|
East India |
2% |
|
South India |
2% |
A look at category-wise growth shows the Quick Service Restaurants (QSR) segment led the charge with 11 per cent growth. Beauty, wellness & personal care, and food & grocery categories also showed robust health, each growing by 6 per cent.
The fashion and apparel sector, a significant component of Indian retail, also showed resilience with a 5 per cent growth in April, according to broader survey findings from the same period. Conversely, sports goods, along with consumer durables and electronics, experienced the slowest growth at 1 per cent each.
Table: Categorywise growth
|
Category |
YoY Growth (April 2025 vs April 2024) |
|
Quick Service Restaurants (QSR) |
11% |
|
Beauty, Wellness & Personal Care |
6% |
|
Food & Grocery |
6% |
|
Fashion & Apparel |
5% (as per wider survey data) |
|
Sports Goods |
1% |
|
Consumer Durables & Electronics |
1% |
Note: The Fashion & Apparel growth figure is based on wider reporting of the same April RAI survey
Purposeful purchases and innovation drive sales
As per Kumar Rajagopalan, CEO of RAI, "Retailers report that footfalls into stores are reducing. However, customers who come to the stores are buying with a purpose and are also experiencing new product introductions. Retailers who have innovative products or aspirational products are performing very well in the market."
This observation suggests a shift towards more considered purchasing decisions, where quality, novelty, and aspiration play key roles. For the fashion & apparel sector, this implies that brands focusing on unique designs, sustainable practices, or tapping into aspirational consumer segments are likely to see better traction.
While overall footfalls might be lower, the conversion rates for those who do visit stores appear to be strong, driven by specific needs or the allure of new offerings.
In fact, the outperformance of retailers with "innovative products or aspirational products," as highlighted by Rajagopalan, serves as a compelling, albeit general, case study.
For instance, QSRs leading with 11 per cent growth often thrive on menu innovation, quick adoption of digital ordering, and appealing value propositions. Similarly, in the beauty and personal care segment (6 per cent growth), new product formulations, a focus on organic or sustainable ingredients, and personalized experiences are likely contributors. Within fashion & apparel, brands that are quick to adapt to changing trends, offer unique value, or build a strong aspirational connect are better positioned in the current market.
A multi-trillion rupee opportunity
The long-term view, underscored by the BCG-RAI report, remains exceedingly bright. The projection of the retail market reaching Rs 190 trillion by 2034 is a testament to India's economic potential. Factors such as:
• Rising affluence: Increasing disposable incomes leading to higher spending.
• Growing middle class: A larger consumer base with growing aspirations.
• Demographic dividend: A young and dynamic population.
• Women in the workforce: Increased financial independence and new purchasing power, significantly impacting categories like fashion, beauty, and personal care.
These macroeconomic drivers are expected to boost sustained growth across various retail sectors, including fashion and apparel, which traditionally benefit from increased discretionary spending and evolving lifestyle choices.
Therefore, while India’s retail sector signs of moderated growth and evolving consumer behavior characterized by purposeful buying, the underlying fundamentals remain strong. Retailers who adapt, innovate, and cater to the aspirational yet value-conscious Indian consumer are well-placed to thrive in a market poised for massive expansion in the coming decade. The fashion & apparel sector, while navigating current trends, continues to be a vital part of this growth story, reflecting the dynamism of Indian consumer demand.
