India continues to be one of the most optimistic consumer markets globally. 61% of consumers expect continuous good times versus 34% who expect widespread unemployment or depression. This is second only to China and sits far above the global average of around minus 12%, according to BCG’s latest Global Consumer Radar report.
Only 17% consumers believe that recent global conflicts or political events will slow down India’s growth. This is the second lowest after China. In contrast, over 60% of consumers in the UK, France and Germany anticipate rising unemployment or an economic downturn.
Kanika Sanghi, partner and director, BCG said, “Even as many global markets are seeing softening, Indian consumers continue to show confidence with 60% expecting to increase household spending over the next six months. For businesses, the priority is to decode the drivers and shape of this shift – understanding personal preferences, category dynamics, shifting motivations and channel those insights into bold portfolio bets that match India’s strong consumption cycle"
BCG noted a strong and sustained positive sentiment for higher and middle-income cohorts but noted that this hasn’t trickled down to the lower income cohort whose sentiment around financial security continues to be at significantly lower levels.
Discretionary spend to drive purchases
The report indicates sustained momentum in spending intentions, especially among lower-income groups. However, inflation was the primary driver of increased spending intent across countries, including India.
60% of consumers expect their total spends to be higher in the next six months, up from 50% in Sept’24. All tracked categories show net expected increases, led by automobiles (+70%), mobile plans and devices (+63% each).
Interestingly, for the 1/3rd of Indian consumers who expected to spend more, this increase was driven primarily by discretionary purchases.
BCG also said that category-specific behaviours are emerging. Long-cycle and essential categories such as auto, mobile devices, mobile plan, and house/apartment rental see higher intention to spend in the near future, while the intention to spend is lower in frequent consumption categories such as packaged snacks and soft-beverages.
Brands should pinpoint category motivations and plug brand narratives into wallet share opportunities.
AI is shaping how India shops
India stands out as one of the global front-runners in GenAI adoption with 62% consumers using GenAI tools in their daily lives. India also leads in GenAI use for shopping, with 64 percent of users relying on these tools for brand and product decisions.
“India’s consumers are rapidly embracing a fully digital, AI-enabled path to purchase, with GenAI now firmly embedded in everyday decision-making,” said Parul Bajaj, India leader - marketing, sales and pricing practice, BCG. “For brands, this signals a decisive shift: think beyond SEO and optimise in a world of AEO (answer engine optimisation) with structured, trustworthy and comparison-ready content.”
Even as shoppers embrace new cutting-edge tools, they have to make trade-offs on aspects like sustainability – where strong interest is accompanied with a pronounced say–do gap –and malleable personal preferences, where many claim openness to new brands, but continue to buy familiar ones.
On average, eight in ten Indian consumers say they think about climate change or sustainability when making day-to-day purchase decisions across categories (the highest globally). But only 9-15% are willing to pay more for sustainable options, revealing a sizeable say–do gap.
Even when it comes to purchases, Indians are creatures of habit. Despite claiming a willingness to try new brands, 84% of consumers default to their usual brands or brands they have used in the past. This inertia suggests considerable headroom for brands to shape consumer choices and shift purchase patterns.
