Home ／ Insights on entering the Indian market
2026.03.24
India's personal consumption reached about USD 2.1 trillion (about JPY 315 trillion) in 2024, doubling over a decade from USD 1 trillion in 2013 (IBEF). Driving this growth is the rapidly expanding middle class. The population earning $10,000 or more annually is projected to nearly triple, from 60 million in 2024 to 165 million by 2030, and India is widely expected to become the world's third-largest consumer market by 2026 (Daily Pioneer).
What matters for Japanese companies is that this middle class is not just "growing in number" — the "quality" of consumption is also changing rapidly. A shift is under way from the old priority of "cheapest first" to an emphasis on "quality, brand, and experience," with spending increasing on premium consumption, health-conscious products, and personalized services.
India's middle class is trending toward premiumization across a wide range of categories, from daily necessities to luxury items. By 2036, the middle and upper classes are projected to account for 93% of total consumption spending (up from 80% in 2026), and the segment willing to pay for quality and brand story is rapidly expanding. This "choosing something good even if it costs a bit more" behavior is especially notable in smartphones, beauty products, and food.
This premium orientation of the middle class is behind Apple's iPhone recording record sales in India, and global brands such as Starbucks and IKEA accelerating store openings in Tier 2 cities.
India's Gen Z (born 1997 or later) and millennials make up about 52% of the population and are leading the digitalization of consumer behavior. The number of credit cards issued is projected to nearly triple, from 102 million in 2024 to 296 million in 2030, and combined with the spread of Buy Now Pay Later (BNPL) services, the middle class's purchasing power is expanding further.
Purchasing on e-commerce platforms (Amazon India, Flipkart, Meesho) has become mainstream, and the share of online sales is surging, especially in the fashion, beauty, and food categories. Digital Payments in India Improving infrastructure is strongly reinforcing this trend.
Since the pandemic, India's middle class has significantly increased spending on health and wellness. Categories such as organic food, functional beverages, fitness apps, and smartwatches, making up the health-conscious market, are growing at more than 20% a year, and awareness of investing in "preventive care" is rising especially among the middle class in Tier 1 and Tier 2 cities. The expansion of the Ayurvedic products market should also be understood in this context.
Consumption is expanding rapidly not just for goods but for "experiences." Spending on dining out, travel, entertainment, and education (EdTech) is increasing, and the dining-out market in particular Zomato and Swiggyといったフードデリバリーの普及により、Tier2・Tier3都市まで浸透が進んでいます。映画（ボリウッドだけでなくOTTプラットフォーム）、スポーツ（IPLクリケット）、旅行（国内旅行の急増）が体験消費の主要カテゴリーです。
Environmentally conscious consumption is gradually taking hold among India's younger middle class. Interest in eco-friendly packaging, sustainable fashion, and EVs (electric vehicles) is rising, and "making choices that are good for the planet" is becoming something of a status symbol. That said, tolerance for a price premium remains limited compared with Europe and the US, and "affordable sustainability" is key to winning this market.
These cities have the highest affinity for global brands and are the main market for premium products and services. They have a thick "upper-middle" segment with household incomes above 800,000 rupees a year, the segment most receptive to the quality appeal of Japanese brands. The Delhi Market and The Mumbai Market are explained in detail in separate articles.
According to a 2026 World Economic Forum (WEF) report, India's consumption growth is increasingly dispersing away from Tier 1 cities, and Tier 2 cities are the next growth engine (WEF). Thanks to the penetration of e-commerce platforms, these are markets that can be reached even without a physical distribution network.
The spread of low-cost 4G/5G connectivity from Jio and Airtel is rapidly improving digital access in rural areas. As the success of Meesho (social commerce) and Flipkart Shopsy shows, a huge market opportunity exists in product categories priced below 5,000 rupees.
インド中間層にとって「日本ブランド」は品質の象徴です。しかし、日本国内と同じ価格帯では市場の大部分にリーチできません。成功する日本企業は「手の届くプレミアム」（Affordable Premium）というポジショニングを取り、現地仕様の価格設計を行っています。例えばユニクロはインド向けに価格帯を調整し、999ルピー（約1,700円）からの商品ラインを展開して中間層への浸透を図っています。
India's e-commerce market is worth about USD 100 billion in 2025, but even more noteworthy is the rapid growth of social commerce. Instagram marketing A D2C strategy that links social commerce with e-commerce platforms is the most effective way to reach the middle class and convert them into buyers.
Indian consumers show a strong affinity for products "made for them." Multilingual packaging, local adaptation of taste and specifications, and launching limited-edition products timed to festival seasons —localization the depth of these efforts determines the speed of market penetration. Differences in Business Customs Between Japan and India understanding these is the first step.
After building a track record in Tier 1 cities, a phased expansion into Tier 2 and Tier 3 cities becomes a pillar of the medium- to long-term growth strategy. Competition is relatively limited in these cities, an environment where first-mover advantage is easier to build. Pros and Cons of Entering the Indian Market Companies need to design a phased scaling strategy while comprehensively assessing these factors.
India's middle-class consumption market is expected to keep expanding steadily toward 2030, driven by the following structural factors.
Demographic Dividend: with an average age of 28, a growing working-age population will keep pushing up consumption.
Digital infrastructure：UPI月間取引216億件超、5G全国展開、クレジットカード3億枚体制が購買力を拡張。
Accelerating Urbanization: by 2030, the urban population will exceed 600 million, intensifying the agglomeration effects of consumption.
Policy Support: schemes such as Make in India and PLI (Production-Linked Incentive) are supporting the expansion of domestic demand.
For Japanese companies, India's middle-class market is not "the next China" but "a growth story unique to India."Appropriate market research and building a strategy that stays close to Indian consumers will determine success in this huge market.
No, the quality of consumption is changing. A shift is under way from the old priority of cheapness to an emphasis on quality, brand, and experience. Choosing something good even if it costs a bit more is becoming a notable behavior in smartphones, beauty products, and food.
Japanese brands are recognized as a symbol of quality. However, because pricing at the same level as in Japan cannot reach most of the market, successful companies take an affordable-premium positioning. Adjusting the price range for the local market is one example of this.
Since the pandemic, the middle class has significantly increased spending on health and wellness. Organic food, functional beverages, and fitness-related categories have maintained high growth rates, and awareness of preventive care is rising, especially in Tier 1 and Tier 2 cities. The expansion of the Ayurvedic products market can be understood in the same context.
Using e-commerce platforms and social commerce is effective. Because these markets can be reached even without a physical distribution network, Tier 2 cities are positioned as the next growth engine. After building a track record in Tier 1 cities, a strategy of phased expansion into these cities, where competition is relatively limited, becomes a pillar of the medium- to long-term plan.
Environmentally conscious consumption is gradually taking hold, especially among the younger middle class, with rising interest in eco-friendly packaging and EVs. However, tolerance for a price premium remains limited. How to achieve affordable sustainability is key to winning this market.
We recommend starting with locally tailored pricing design and a D2C strategy that links e-commerce with social commerce. Deepening localization efforts — multilingual packaging, local adaptation of taste and specifications, and limited-edition products timed to festival seasons — also determines the speed of market penetration.
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