New Delhi, March 23 (IANS) India is on track to become the global consumption capital, outpacing major economies, according to a new report. The consumption in India accounts for 56 per cent of the country’s GDP and is growing at the fastest rate in the world. A report by Angel One and Iconic Asset showed that over the next decade, India’s consumption is projected to double by 2034. One of the key drivers of rising consumption is the increasing number of nuclear families. Household growth in the country is outpacing population growth, leading to a surge in spending. Additionally, India is set to lead the global workforce expansion, further boosting economic activity.

The report also highlights India’s impressive savings potential. Between 1997 and 2023, the total savings in the country amounted to $12 trillion. Over the next 25 years, this figure is expected to make a ten-fold jump to $103 trillion by 2047. This rise in savings will unlock significant opportunities for increased spending and economic growth. Recent tax cuts announced in the Union Budget will also contribute to rising consumption. The report estimates that these tax reductions will free up Rs 1 lakh crore, leading to an additional Rs 3.3 lakh crore in spending, which could boost India’s GDP by 1 per cent.

India is expected to follow a global trend where discretionary spending, such as electronics, apparel, accessories (including jewellery), and experiences, grows faster than essential spending. The report notes that during periods of economic expansion, both the US and China saw discretionary consumption outpace basic spending, and India is likely to follow the same pattern. "Consumption spend in the US increased 10X during the phase of a strong rise in per capita income. India can witness similar growth in consumption as per capita income rises," the report added. 

Despite the rise of modern retail, 92 per cent of India’s retail trade still happens through small neighbourhood Kirana stores. This presents a huge opportunity for organised retail to expand and capture a larger market share, the report said. The report also highlights the role of India’s young population in driving consumption. India has more Gen Zers than the entire population of the United States. By 2035, every second rupee spent in India will come from a Gen Zer, further fueling the country’s consumption boom.

/IANS