India’s Retail Market Defies Global Trends

Team L&M

India’s retail sector is booming, even as malls in Western countries face closures and repurposing. Rising consumer demand and strong investor confidence are driving this growth.

Anuj Kejriwal, CEO – Retail Leasing and Industrial & Logistics, ANAROCK Group, says, “Over the next three years, Indian malls will attract USD 3.5 Bn in capital inflows. More than 88 foreign brands have entered India, seeking space in scarce Grade-A malls.”

Scarcity of Quality Retail Space

India has a severe shortage of Grade-A mall space. Tier-1 cities offer 4–6 sq. ft. per person, Tier-2 and 3 just 2–3 sq. ft. Grade-A malls only have 0.6 sq. ft. per capita. By comparison, the US averages 23 sq. ft., and China over 6 sq. ft.

High demand and limited supply keep occupancy at 95–100%, with long waitlists and rising rentals. Leasing now often outpaces construction, making India’s retail market highly attractive to global investors.

Lifestyle Hubs, Not Just Shopping

Indian malls combine shopping, dining, and entertainment. Daily footfalls exceed 20,000 on weekdays and 40,000 on weekends. F&B and entertainment contribute 30–35% of visits.

Unlike Western malls, Indian retail spaces thrive despite e-commerce growth. Offline stores act as experience and trust-building centers, while online platforms boost scale.

Institutional Investment on the Rise

India has 600+ operational malls, but fewer than 100 meet international Grade-A standards. Blackstone’s Nexus Select Trust REIT, with 19 malls and 1,000+ brands, generated INR 1,600 Cr in annual NOI. This validates retail-led REITs in India, with more expected by 2030.

Grade-A malls offer 14–18% IRRs, low vacancies, and revenue-linked rent escalation, making retail investment India highly profitable.

Why India Stands Out Globally

Limited supply, rising incomes, high footfalls, and expanding global brands create a unique opportunity. In H1 2025, retail leasing grew 70% YoY, and new mall supply increased 160%. India’s retail market continues to attract global capital and remains resilient against global retail downturns.