India’s Retail Boom: Why Global Investors Are Betting Billions While Western Malls Struggle
While malls in the US and Europe face closures and declining footfalls, India’s retail market is drawing global attention like never before. Investors are pouring in billions of dollars, seeing opportunity where other markets are struggling.
According to Anuj Kejriwal, CEO of Retail Leasing and Industrial & Logistics at ANAROCK Group, India is expected to witness over USD 3.5 billion in capital inflows into retail over the next three years. Foreign brands and institutional investors are rushing to grab space in Grade-A malls, which are in extremely short supply.
Since 2021, more than 88 international brands have entered India, with several others actively scouting locations. By contrast, Western markets are in crisis: in the US alone, around 1,200 mall stores have closed since 2020, and nearly 40% of empty malls are being repurposed or rezoned to adjust to falling demand.
A Stark Contrast
India’s retail stock per capita is among the lowest globally. In Tier-1 cities, people have just 4-6 square feet of retail space per person, while Tier-2 and Tier-3 cities offer only 2-3 square feet. Grade-A malls account for a mere 0.6 square feet per person, compared with 23 square feet in the US and over 6 square feet in China.
This extreme undersupply keeps occupancy rates high, with many premium malls running waitlists for new tenants.
Why India’s Retail Market Is Booming
Several factors are driving growth:
Demographics & Economy: India is on track to become a USD 6 trillion consumption economy by 2030, supported by a young population, rising incomes, and rapid urbanisation.
Lifestyle Destination: Malls are no longer just shopping spaces—they offer entertainment, dining, and social experiences. Footfalls in major malls routinely exceed 20,000 on weekdays and 40,000+ on weekends. Food and entertainment now make up 30-35% of traffic.
E-commerce as a Friend, Not a Foe: Unlike Western markets, India’s e-commerce penetration is only around 8%, much lower than in China or the US. Offline stores continue to play a critical role in building trust and delivering experiences, often achieving 2-3x higher conversions than online channels.
Investor Appeal
Grade-A malls in India offer strong returns:
Internal rates of return between 14-18%—almost double Western yields.
Rising incomes, low vacancies, long-term rental escalations, and consumption-linked revenue-sharing create stability and upside.
Retail-focused REITs have boosted confidence further. For instance, Blackstone’s Nexus Select Trust, listed in 2023, owns 19 malls with over 1,000 brands and generates INR 1,600 crore in annual net operating income. Two more retail REITs are expected by 2030, highlighting institutionalisation in the sector.
Leasing Dynamics & Scarcity
The limited supply of quality retail space and high brand demand have led to faster leasing cycles, sometimes quicker than construction itself—a rare global phenomenon. Rental rates have consistently surpassed pre-pandemic levels, showing that India’s malls are not just surviving—they’re thriving.
Kejriwal says it best:
“While Western malls face oversupply, declining footfalls, and online competition, India has rising incomes, limited quality supply, strong footfalls, and aggressive brand expansion. Leasing in Grade-A malls grew almost 70% YoY in H1 2025, with new mall supply increasing over 160%.”
The Big Picture
Global capital searching for yield and long-term growth finds India’s retail market a bright spot. With a young population, rising consumption, and extreme scarcity of high-quality retail space, India offers a perfect storm of opportunity—for international brands, investors, and developers alike.
