The recently released 'Estimates of State Domestic Product 2024-25' by the Directorate of Economics and Statistics gives a peek into India’s economic landscape at the sub-national level.

While the report indicates an overall positive growth path, closer examination reveals significant disparities in growth rates across states and union territories, with varied impacts on consumer spending patterns across the country.

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Overall growth and key drivers

The report estimates a real GDP growth of 6.5 per cent for the 2024-25 fiscal year, a notable figure against the backdrop of global economic fluctuations. This growth is primarily attributed to robust performances in sectors such as:

• Construction: At 8.6 per cent growth, it’s led by infrastructure development and a buoyant real estate market in several regions.

• Financial, real estate & professional services: A 7.2 per cent growth indicates a maturing financial sector and increasing demand for professional services.

• Trade, hotels, transport, communication & services related to broadcasting: Growth at 6.4 per cent reflects increased mobility, tourism, and the continued expansion of the digital economy.

• Private final consumption expenditure (PFCE): This is expected to register a healthy growth of 7.6 per cent, a crucial indicator of overall economic activity and a primary driver of GDP.

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High flyers and lagging regions

The state-wise data unveils a fascinating spectrum of economic performance. Based on available data for 18 states and union territories, Tamil Nadu emerges as the frontrunner with an impressive real GSDP growth rate of 9.69 per cent. This remarkable growth, the highest in the state's recent history, is propelled by strong performances across its tertiary (services) and secondary (manufacturing and construction) sectors.

Andhra Pradesh follows closely with a growth rate of 8.21 per cent, showcasing the economic dynamism in the southern part of the country. Conversely, while specific data for all states are not yet available, trends suggest that some states might be experiencing relatively lower growth.

Historical data indicate that states like Meghalaya, Goa, and Puducherry have had lower average growth rates in the past. The current report's full details, once released, will provide a clearer picture of the bottom end of the growth spectrum for FY 2024-25.

Table: Top performing states

Impact on consumer spending

The difference in state-level growth rates is bound to have a differentiated impact on consumer spending across the country.

• High-growth states: Higher economic growth typically translates to increased job creation and higher incomes for the populace. This increase in disposable income fuels greater consumer confidence and a higher propensity to spend. As incomes rise, consumers tend to shift their spending towards non-essential goods and services such as entertainment, travel, high-end electronics, and premium brands.

Increased savings and disposable income may also lead to higher investments in assets like real estate and financial instruments. For example, Tamil Nadu with its robust 9.69 per cent growth, cities like Chennai, Coimbatore, and Madurai are likely to witness a rise in demand for retail, hospitality, and entertainment sectors. We might see increased sales of automobiles, consumer durables, and a rise in spending on leisure activities and dining out.

• Low-growth states: Lower growth rates often mean limited income growth and potentially higher unemployment, leading to cautious consumer behavior. Consumers in these regions are likely to prioritize spending on necessities such as food, fuel, and basic healthcare.

Price becomes a more significant factor in purchasing decisions, with consumers seeking value-for-money and potentially delaying discretionary purchases. If a state experiences significantly lower growth, its cities might see slower growth in retail sales, and consumers might be more inclined towards budget-friendly options. Demand for premium products and luxury services might remain subdued compared to high-growth regions.

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Future outlook

Analyzing historical GDP growth trends reveals that certain states have consistently performed well, while others have lagged. Factors such as industrialization, urbanization, infrastructure development, and policy initiatives play a crucial role in shaping these growth trajectories.

The current report suggests a slight moderation in the overall GDP growth rate compared to the previous fiscal year (FY 2023-24), which saw a growth of 9.2 per cent. This moderation could influence the overall pace of increase in consumer spending nationwide.

Table: Historical GDP growth rates

The 'Estimates of State Domestic Product 2024-25' underscores the diverse economic realities across India. While the country continues on a growth path, the varying speeds of growth at the state level will lead to distinct consumer spending patterns.

High-growth states are likely to experience a surge in discretionary spending and investment, while slower-growing regions might see consumers remain focused on essential needs and value. Understanding these regional nuances is crucial for businesses and policymakers alike to formulate effective strategies and ensure inclusive economic development across the nation.

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8 May, Mumbai 2025

India's fast growing creator economy is set to become a monumental force in driving consumer spending, with a huge potential to influence $1 trillion (Rs 84.5 lakh crore) annually by 2030. This is according to a new report ‘From Content to Commerce: Mapping India’s Creator Economy’ by the Boston Consulting Group (BCG), which highlights the significant and rapidly growing impact of content creators on consumption, extending its reach beyond metro hubs.

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The report underscores the current substantial influence of India's 5 million content creators, who already sway over $350 billion (Rs 29.6 lakh crore) in consumer spending on a yearly basis. This influence currently accounts for approximately 20 per cent of the overall $2 trillion consumer spending in India, showcasing the powerful connection creators have established with their audiences across all levels of urbanisation.

Creator influence across cities

The impact of the creator economy on consumer spending varies across metros, Tier II, and III cities, reflecting different levels of digital penetration, disposable incomes, and consumer behaviour. The BCG report highlights a significant trend: what began as a primarily metro-centric phenomenon is now deeply penetrating smaller cities and towns.

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Table: Creator influence on consumer spending by city

Metros: Consumers in metros show a strong inclination towards branded and premium fashion influenced by creators who often collaborate with high-end labels. The focus is on staying updated with global trends and convenience through online shopping. For example, when fashion creator Kavya Iyer (Bangalore) partnered with a sustainable, albeit premium, clothing brand, her metro audience, increasingly conscious about ethical fashion, showed a significant interest, leading to a noticeable increase in the brand's online sales within these urban centers.

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Tier II cities: Here, creators showcase affordable and trendy fashion often sourced from online marketplaces that see significant traction. There's a growing aspirational value attached to fashion, and creators bridge the gap by showcasing accessible yet stylish options.

For example, Surbhi Gupta from Jaipur, a micro-influencer focusing on affordable ethnic wear, gained immense popularity in her city and neighboring Tier III towns by showcasing how to style traditional outfits for modern occasions, driving sales for local artisans and online ethnic wear platforms.

Tier III cities: Interestingly, the influence of creators in Tier III cities is substantial, often driven by relatability and trust in local creators or those using regional languages. Value-based purchases and products available on social commerce platforms are key.

Fashion choices are often influenced by cultural relevance and practicality. For example, Rakesh Kumar from Lucknow, a tech creator, while primarily focused on technology, also subtly influences apparel choices through his lifestyle vlogs.

His down-to-earth style resonates with his Tier II and III audience, leading to increased interest in the casual wear brands he features. This highlights how even non-fashion creators can impact apparel spending in these regions.

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Impact across all tiers

Regardless of the city tier, creators are playing a vital role in:

Democratizing access: They showcase fashion that caters to various budgets and preferences, making style more inclusive.

Building trust: Audiences often trust creator recommendations more than traditional advertising, leading to higher conversion rates.

Driving trends: From global high fashion in metros to regional styles in Tier III cities, creators are instrumental in shaping trends at every level.

The BCG findings emphasize that the creator economy's influence is no longer confined to major metros only. Its growing reach into Tier II and III cities presents a significant opportunity for fashion and apparel brands to connect with a wider consumer base.

Tailoring marketing strategies to resonate with the specific preferences and consumption patterns of each city tier, while leveraging the authentic voice of creators, will be crucial for success in this evolving landscape.

The $1 trillion consumption boom by 2030 will be led by this pan-India creator-consumer connection, making it imperative for businesses to understand and engage with this dynamic force at every urban level.

LATEST FASHION NEWS

In a milestone collaboration between the Circular Fashion Federation (CFF) and global consulting powerhouse KPMG, a study has showcased the transformative potential of India's growing secondhand apparel market.

Titled ‘Unlocking the Value in Pre-Loved: India's Secondhand Fashion Revolution’, the report unveils important data and looks into case studies and expert insights, underscoring an important moment in the country's fashion market.

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The rise of secondhand fashion in India

India, known for its rich textile heritage and vibrant fashion industry, is now witnessing a move towards sustainability in apparel consumption. The CFF-KPMG study projects a 35 per cent compound annual growth rate (CAGR) for the Indian secondhand clothing market over the next five years.

The report identifies a growing consumer preference for pre-loved fashion items, which has got a boost for increasing environmental consciousness and a desire for unique, affordable clothing options. This evolving trend marks a departure from traditional fast fashion paradigms towards more conscientious consumption patterns.

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The report's key findings include:

Market size: The current Indian secondhand apparel market is estimated at Rs 15,000 crore, and projections indicate it will reach Rs 65,000 crore by 2030.

Consumer demographics: The study identifies Gen Z and millennials as the primary drivers of this growth, with 78 per cent of respondents in this age group having purchased secondhand clothing in the past year. However, 45 per cent of older people are also now engaging with the market, indicating a broadening appeal.

Online dominance: Online platforms, including dedicated resale marketplaces and social media channels, account for 62 per cent of current secondhand sales, highlighting the importance of digital infrastructure in market growth.

Sustainability imperative: Almost 72 per cent of consumers cited environmental concerns as a key motivator for buying secondhand, indicating growing understanding of the fashion industry's environmental impact.

Price sensitivity: While sustainability is a significant factor, 85 per cent of consumers also highlighted affordability as a major draw, particularly in the current economic climate.

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Youth at the helm

One of the most revealing insights in the report is the generational tilt in consumer behavior. Over 80 per cent of Gen Z respondents said they had either purchased or were open to purchasing secondhand clothing. For many, this is less about thrift and more about ethics and individuality.

Case studies in the report spotlight young entrepreneurs and college-led initiatives that are leading this movement. For example, student-led thrift collectives in cities like Bengaluru and Pune are building hyperlocal resale communities using Instagram as their primary storefronts. These micro-economies are not only curbing waste but also democratizing fashion access

The digital marketplace boom

The report identifies online resale platforms as one of the key enablers of the secondhand fashion revolution in India. Marketplaces such as Ziniosa, Curated Finds, and Lulu Thrift are allowing consumers to buy and sell gently used clothing with ease, security, and a sense of style.

KPMG’s data shows that over 50 per cent of secondhand fashion consumers now prefer digital channels due to wider selection, trust in curation, and ease of delivery.

In fact, CFF and KPMG highlight that 63 per cent of urban respondents see online thrift platforms as their first point of contact when seeking pre-loved apparel. These platforms are also integrating AI tools for pricing, product authentication, and sustainable grading, further increasing consumer confidence.

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Sustainability front and center

Environmental impact is a major theme throughout the report. With India generating an estimated 7.8 million tonnes of textile waste annually, and the fashion industry being the third-largest polluter globally, the importance of extending garment life cannot be overstated.

CFF’s analysis reveals that each pre-owned garment purchased instead of new can save approximately 5 kg of CO₂ emissions, in addition to reducing water and chemical usage. If just 10 per cent of India’s fashion purchases shifted to secondhand by 2030, the country could cut an estimated 1.2 million tonnes of textile waste annually.

The rise of pre-owned luxury

While the bulk of the secondhand market comprises casual and fast fashion items, the report also draws attention to the rapid growth of pre-owned luxury fashion. Platforms like Confidential Couture and ReLoved are redefining aspirational consumption by making high-end brands accessible through resale.

The Indian pre-owned luxury segment, currently valued at $618 million, is expected to cross $1.56 billion by 2032. These platforms are investing in authentication technologies and curated storytelling to overcome the stigma often associated with used luxury goods.

The report doesn't stop at analysis—it gives recommendations to unlock further value from the pre-loved fashion market:

Policy incentives: Introduce tax benefits and GST reductions for certified resale businesses.

Consumer education: Launch national campaigns to shift perceptions around pre-owned fashion.

Circular infrastructure: Encourage public-private partnerships to build garment collection, sorting, and recycling hubs.

Innovation hubs: Foster startups and tech solutions that enhance product traceability and digital resale.

Thus, ‘Unlocking the Value in Pre-Loved’ is not just a report; it is a call to action. India is at a unique inflection point—facing the dual pressures of environmental responsibility and a rapidly growing consumer base. The secondhand fashion revolution offers a sustainable, inclusive, and scalable solution to meet both.

With digital innovation, youth leadership, and supportive policy shifts, India could emerge as a global leader in circular fashion. The clothes may be pre-loved, but the vision they represent is entirely forward-looking.

LATEST FASHION NEWS