India's retail market is expected to more than double to Rs 210-215 lakh crore in 2035 from Rs 90-95 lakh crore in 2025 as the country continues to outperform major global economies and is on track to become the world's third largest economy, according to a report released on Monday.
As India's retail sector enters its next phase of growth, success will favour those who combine clarity of focus with disciplined execution and AI-led transformation, as per the report “Winning Codes for Retail 2035: Capturing the Rs 200 Trillion Prize”, released jointly by Boston Consulting Group (BCG) and the Retailers Association of India (RAI) at the Retail Leadership Summit 2026.
Retailers who embrace structural change across consumer engagement, operating models and talent will be best positioned to capture disproportionate value in the journey towards a Rs 200 lakh-crore retail market, it said.
Explicit trade-offs and disciplined execution are critical to delivering a differentiated customer value proposition and sustaining profitable growth, the report stated. The findings underscore the increasingly complex and context-driven nature of consumer decision-making, alongside the growing influence of technology, especially artificial intelligence, in shaping every stage of the shopper journey, it said.
The report calls on retailers to reassess traditional assumptions, deliver sharply differentiated value propositions and embrace AI as a catalyst to fundamentally redesign the retail organisation. “India's retail is an inspiring story. The sector is poised to expand into a nearly Rs 200 lakh-crore opportunity over the next decade. More importantly, both the offline and online operating cash flows are showing clear and sharp improvement. The winners of the future will have sharp differentiated value proposition, at scale use of AI and technology and excellent execution,” said Abheek Singhi, MD & senior partner, BCG.
According to the report, agentic commerce has moved from experimentation to reality with GenAI increasingly influencing research and purchase decisions and nearly 42 per cent of urban US consumers have already used GenAI. A functional transformation approach can unlock gains of 40-60 per cent, compared with 10-15 per cent typically achieved through isolated use-case deployments, it noted.
“Agentic commerce is already influencing how consumers discover, evaluate, and purchase products globally. Given India's strong digital adoption curve, we expect AI-led shopping journeys to accelerate rapidly in urban India, particularly among Gen Z consumers,” BCG Managing Director & Partner Bharat Mimani said.
The bigger opportunity, however, lies beyond front-end experiences. Retailers that adopt an end-to-end AI-led functional transformation approach across merchandising, supply chain, marketing and service can unlock 40-60 per cent performance gains, far exceeding the incremental impact of isolated use cases, he added.
“India’s retail industry enters 2026 with three parallel realities: demand remains resilient, consumers are becoming more discerning, and retailers are innovating... The winners of the next decade will be those who treat transformation as a discipline rather than a project, and who build trust by delivering consistently across formats, channels, and price points,” Retailers Association of India CEO Kumar Rajagopalan said.
Also read: India’s retail inflation rises to 2.75 pc in January 2026
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