India’s consumer spending is likely to almost quadruple by 2020 to $3.6 trillion spurred by economic growth and rising incomes, the Boston Consulting Group said.
Consumer expenditures are set to expand 3.6 times from $991 billion in 2010, a 14 percent annual pace of growth, the Boston-based company said in a report. That compares with the projected global average pace of 5.5 percent and 9 percent for emerging economies, it said.
Higher consumer spending may give companies such as Hindustan Unilever Ltd., a unit of the world’s second-biggest consumer-goods maker, an opportunity to expand in Asia’s third-biggest economy. Businesses “with growth ambitions must make India a priority” as household incomes could climb 2.9 times from 2010 to 2020, the company said.
“While inflation and higher interest rates may have momentarily caused consumers to hit the pause button, the long-term trends for consumer spending in India all point north,” said Arvind Subramanian, a partner in Boston Consulting Group’s Mumbai office and an author of the report.
By 2020, India will constitute 5.8 percent of global consumption, compared with 2.7 percent now, the company said.