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India’s Consumption Story: Rising Aspirations, Thriving Markets

India’s Consumption Story: Rising Aspirations, Thriving Markets
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The  National Sample Survey Office of the Indian Government regularly conducts the Household Consumption Expenditure Survey (HCES). The summary of the level of household consumption expenditure is measured by Monthly Per Capita Consumption Expenditure (MPCE). The survey covers more than 2. 61 lakh households across the whole of India.

The primary aim is to gather data on the consumption spending of households across various expenditure categories such as food, clothing, health, education, and other goods and services. This information is crucial for understanding living standards, poverty levels, and the economic well-being of the population.

The most recent survey results throw up some interesting insights. 

  1. Rural India is growing fast and catching up
% growth19.1%82.0%35.7%163.8%
% growth29.2%79.5%32.6%145.6%
Difference as % of rural MPCE75.990.888.283.971.2

While metro cities continue to be a large contributor of India’s consumption spends, it is important to highlight that spending is reaching the grassroots as well amping up overall consumption spending. This long-term trend is also driving down inequality between urban and rural India.

  1.   Engel’s law comes into play : as income increases, percentage of income spent on food declines
Period% share of cereals in avg. MPCE% share of food in avg. MPCE% share of cereals in avg. MPCE% share of food in avg. MPCE

Key consumption trends 

  1. Indians moving beyond roti, kapda and makan
Trend in percentage composition of MPCE
% share in total MPCE
toilet articles & other household consumables4.734.834.024.015.12
durable goods2.623.953.694.856.89
toilet articles & other household consumables5.504.653.883.884.98
durable goods3.614.464.315.607.17

As India’s GDP per capita rises, spending on FMCG and consumer durables has increased. The FMCG industry reached $121.8 billion in 2023, with urban areas contributing 65% and rural areas 35% of sales. Growth is driven by shifts to organized markets and e-commerce. Consumer durables demand is rising due to higher incomes, urbanization, and a growing middle class. Increased discretionary income and easy financing have shortened product replacement cycles, making items like ACs and LCD TVs more common. Policies like the PLI Scheme and National Policy on Electronics 2019 further support sector growth.

  1. Entertainment is no longer a luxury 
Trend in percentage composition of MPCE
% share in total MPCE
Rural – Entertainment0.420.600.790.991.09
Urban – Entertainment1.161.791.601.611.58

India’s Media & Entertainment (M&E) sector has evolved into an omni-channel industry meeting the growing consumption needs of a diverse audience. Rural spending on entertainment is closing the gap with urban areas. In 2023, the sector grew by 8% to ₹2.3 lakh crore and is projected to reach ₹3.1 lakh crore by 2026, driven by higher household spending post-pandemic. Growth areas include cinema, niche OTT platforms, and curated content, with more consumers willing to pay for differentiated content through subscription models.

  1. Rise of the travel economy 
Trend in percentage composition of MPCE
% share in total MPCE
Rural – conveyance2.943.633.454.207.55
Urban – conveyance5.526.215.636.528.59

The rise of millennials and increasing per capita incomes in India are driving a shift from goods consumption to experiences, particularly in travel and leisure. Spending in aviation has surged by 27.42% from FY22 to FY24, with India becoming the third-largest domestic aviation market. The government plans to increase the number of operational airports from 148 to 220 by FY25. Similarly, railway sector spending grew by 56.35% in the same period, boosted by significant increases in both freight and passenger traffic post-pandemic.


India, a diverse and rapidly evolving nation, is experiencing rising per capita incomes and thriving urban, semi-rural, and rural centers, leading to increased consumption nationwide. Regions such as Delhi, Uttar Pradesh, Karnataka, and Tamil Nadu are emerging as consumption hotspots. However, economic and consumption growth varies significantly across states, influenced by factors like state GDP, employment rates, and digital adoption. Despite these disparities, India is projected to become the world’s third-largest economy by 2027 and the third-largest stock market by 2030, driven by strong domestic demand.

Source : 

  1. CMS CONSUMPTION REPORT 2024 : Unfolding India’s Consumption Story
  2. https://www.mospi.gov.in/sites/default/files/publication_reports/Factsheet_HCES_2022-23.pdf
  3. https://www.ibef.org/download/1714543650_FMCG_March_2024.pdf
  4. https://www.ibef.org/download/1714542902_Consumer_Durables_March_2024.pdf

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India’s Consumption Story: Rising Aspirations, Thriving Markets
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