India’s retail sector remains dynamic as inflation offers a measure of relief. Retail inflation for March 2025 is expected to settle between 3.8% and 4%, signalling a steady close to FY24-25. This, alongside a favourable monsoon and easing input costs, could offer consumers and businesses some breathing room.
However, Shein’s high-profile partnership with Reliance Retail is under strain. China’s clampdown on shifting manufacturing overseas, driven by US tariffs, has forced a rethink of the deal. The plan to integrate Indian MSMEs into Shein’s global supply chain is now being scaled back.
Retail leasing, on the other hand, surged 55% year-on-year across India’s top eight cities in Q1. Hyderabad led the way, accounting for 34% of total space leased. New malls and high-street formats continue to attract strong demand, reflecting optimism in physical retail.
FMCG firms are predicted to end FY25 with low single-digit revenue growth. While rural demand improves, urban markets face challenges from quick commerce and a high base. Regional and D2C brands are also intensifying competition, putting pressure on pricing and margins.
The ₹10 pack has emerged as the FMCG battleground this summer, with brands expanding product lines and distribution to tap into tighter consumer budgets amid soaring temperatures.
In electronics, Trump’s tariff war with China has led to price cuts from Chinese suppliers. Indian TV, fridge, and smartphone makers could benefit from lower input costs, with some potential savings expected to be passed on to consumers to revive demand.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. India’s Retail Inflation 2025 updates: March’s retail inflation likely between 3.8-4%
India’s Retail Inflation 2025, Retail Inflation outlook for March 2025 updates: Retail inflation based on Consumer Price Index (CPI) is likely to have closed fiscal year 2024-25 between 3.8 per cent to 4 per cent headline in March.
2. China tariffs hit Shein-Reliance deal: Global sourcing plan from India may shrink
Shein's partnership with Reliance Retail to establish India as a global manufacturing hub faces challenges as China discourages companies from shifting production overseas due to US tariffs. The original agreement, including integrating Indian MSMEs into Shein's supply chain, is being renegotiated and may be scaled down.
3. Retail leasing surges 55% in top 8 Indian Cities: Hyderabad leads the way
During January-March quarter, retailers leased 2.4 million sq ft across eight major cities, showing a 55% year-on-year growth and 6% quarter-on-quarter rise, as per Cushman & Wakefield data. The growth was attributed to new supply in emerging locations, with contributions from both malls and main streets. Hyderabad led the leasing activity with 34% (0.8 MSF) of total volume, demonstrating 106% year-on-year growth, according to an ET report.
4. Indian FMCG firms to end FY25 with single-digit revenue, base favourable in FY26
FMCG firms in India are projected to conclude FY25 with low single-digit revenue growth, buoyed by the flight-to-safe trade. While rural demand showed modest recovery due to a favourable monsoon and easing inflation, urban demand faced headwinds from quick commerce and a high base. Jewellery companies are expected to report strong sales growth.
5. FMCG companies facing stiff competition from regional players on margins: Report
Indian FMCG companies are grappling with intense competition from regional and D2C brands, alongside pressure to clear old stock. While beverage firms anticipate strong summer sales, overall volume growth remains weak, though rural demand offers some balance. Rising raw material costs are forcing price hikes, potentially boosting revenue, but impacting profit margins.
6. Rs 10 packs turn into FMCG’s hottest summer battleground
This summer, consumer goods firms are going all in on the Rs 10 price point, launching new products and formats, while also stepping up marketing and distribution efforts for these smaller, value-driven packs. The move comes amid tighter household budgets and an early start to what is expected to be a harsh summer.
Chinese electronics component manufacturers, reeling from the US-China tariff war, are slashing prices by up to 5% as Indian companies negotiate new sourcing contracts, reports the Economic Times. This rare concession in a sector operating on razor-thin margins of 4-7% could yield savings of 2-3% for Indian fridge, TV, and smartphone makers, potentially allowing them to lower consumer prices to spur demand.
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