India’s retail and FMCG landscape is entering FY27 with renewed confidence, as easing inflation and softer commodity prices set the stage for volume-led growth and gradual margin recovery. Leading consumer goods companies have already reported mid- to high single-digit volume gains in recent quarters, signalling that the operating environment is stabilising after prolonged volatility.
The longer-term outlook remains equally compelling. Industry projections suggest India’s retail market could more than double by 2035, driven by strong consumption momentum and the increasing role of artificial intelligence in shaping customer engagement, supply chains and merchandising decisions. Yet growth is not without structural challenges. Studies indicate that a significant proportion of organised retail stores continue to lose revenue at the shelf level, underscoring execution gaps that technology alone cannot fix.
Meanwhile, consumer shifts are reshaping competitive dynamics. Affordable fast fashion is capturing small-town demand, while global players such as Ikea are deepening localisation efforts and strengthening omnichannel capabilities. Together, these signals point to a sector scaling up, but with sharper attention to efficiency, relevance and execution.
Click on the headings below for insights on how these trends are shaping India’s retail landscape...
1. FMCG firms bet on volume-led growth as easing inflation seen improving margins in FY27
India’s leading fast-moving consumer goods companies expect growth to shift towards volumes in FY27, as easing inflation and softer commodity prices begin to reduce cost pressures and support margin recovery. Industry executives said the operating environment has turned more favourable after several volatile quarters, with mid- to high single-digit volume growth already reported by major FMCG players in the December quarter.
2. India’s retail market to more than double to Rs 210–215 trillion by 2035: Report
India’s retail market is set for massive expansion over the next decade, with its size expected to more than double to Rs 210–215 trillion by 2035 from around Rs 90–95 trillion in 2025, according to a new report. The report, unveiled by Boston Consulting Group (BCG) and the Retailers Association of India (RAI) at the Retail Leadership Summit 2026 underline the strong consumption momentum in the country and highlight how technology, especially artificial intelligence (AI), will play a defining role in shaping the next phase of retail growth.
3. Retail technology works best when it supports, not replaces staff: Study
A study reveals retail HR tech succeeds by empowering frontline employees to enhance customer experience and profitability, not just through advanced systems. Generic tech adoption often fails in diverse retail contexts. Success hinges on socio-technical thinking, supporting employee judgment, and aligning technology with digital literacy, training, and operational factors to create true value.
4. 91 Pc of Organised Retail Stores in India are Losing Revenue at the Shelf
India’s organised retail sector may be growing, but a large part of it is quietly losing money — right at the shelf. A new knowledge report by Vector Consulting Group reveals that 91 percent of organised retail stores experience revenue leakage at the shelf level. The Ticking Shelf: The Overlooked Economics of Store Performance report is based on insights from CXOs and heads of 100 organised retail chains with annual revenues exceeding Rs 500 crore.
5. How budget fast fashion is taking small-town India by storm
More shoppers in India’s smaller towns are choosing affordable fast-fashion brands like Zudio and others over unbranded bazaar clothes, drawn by trendy styles at low prices. This shift is reshaping local shopping habits and giving budget chains a booming market outside big cities.
6. How Ikea is tweaking its retail strategy to align with the changing needs of the Indian market
Ikea has been around in India for about eight years, with another three years before that spent studying the market. It has developed a range that it deems “locally relevant”, like the roti maker, the tawa (pan), the belan (rolling pin), and the pressure cooker, which now constitute about 5% of the products it offers in the country. It has shifted its communication strategy to sync with local culture and fit into local spaces and has worked hard to beef up its omnichannel sales model with about 30% of its sales originating online.