India, home to 1.4 billion people, has a consumer class much smaller than expected, with only about 130-140 million individuals actively spending on discretionary goods and services, a new report from Blume Ventures reveals. While another 300 million people fall into the “emerging” consumer category, their spending habits remain cautious, driven mainly by digital payment ease rather than substantial disposable income.
The study highlights that India’s consumer market is deepening rather than widening—wealth is concentrating among the already affluent rather than expanding to new segments. This trend is fueling “premiumisation,” where businesses prioritize high-end products for the wealthy over mass-market offerings. Luxury real estate and premium smartphones are booming, while budget-friendly options struggle. The “experience economy” is also thriving, with concerts and high-end events seeing record ticket sales.
However, India’s broader economic landscape faces challenges. Income inequality has widened significantly since 1990, with the top 10% now controlling nearly 58% of national income, while the bottom half’s share has fallen to 15%. Middle-class earnings have stagnated, financial savings are at a 50-year low, and debt is rising. Structural headwinds, including job displacement due to AI and limited wage growth, could further weaken consumer spending. While short-term boosts like rural demand recovery and tax cuts may offer some relief, long-term economic growth faces significant risks.
