India’s retail sector has closed 2025 on a firm footing, buoyed by improving consumer sentiment, supportive policy actions, and broad-based category growth, according to the Retailers Association of India (RAI). The association expects 2026 to be a growth-accelerating year driven by higher disposable incomes, policy continuity, and deeper market penetration.
After a subdued start to this year, demand gained momentum through the year and peaked during the festive season, when overall sales rose more than 11 per cent year-on-year (YoY). Value fashion and footwear were standout performers, with GST rate cuts helping reduce prices and lift everyday consumption.
A major shift through this year was the acceleration of Bharat’s consumption engine. Tier II and III cities led store expansion and displayed strong appetite for branded and quality products, narrowing the metro–non-metro divide. Omnichannel retail continued to mature, with shoppers researching online and purchasing offline, reaffirming India’s ‘phygital’ model as the dominant path to purchase.
Policy developments also played a pivotal role. Income-tax relief and GST rationalisation supported household purchasing power, while the rollout of national labour codes marked progress toward formalised employment for India’s large frontline retail workforce, RAI said in a release.
Looking ahead, key priorities for 2026 include a unified One Nation, One Retail Licence and single-window clearances to ease compliance, continued consumption-boosting tax measures, and stronger phygital infrastructure through investments in logistics, digital payments, broadband, and ONDC.
RAI also highlighted the fast-evolving competitive landscape, with new entrants moving from social commerce to marketplaces and ultimately to omnichannel retail. With GST reforms acting as a stimulus and value-driven categories set for sustained demand, RAI anticipates healthier sales growth in 2026 led by the mass market, expanding physical retail networks, and a more mature omnichannel ecosystem.
ALCHEMPro News Desk (HU)
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