India’s Mall Momentum Defies Global Retail Slowdown

India’s retail sector is thriving as Western malls decline. While the US has seen widespread store closures since 2020, India is witnessing strong consumer demand, near-full mall occupancy, and rising rents. Limited organised retail space, low e-commerce penetration, and growing global brand interest are driving investments, with malls evolving into lifestyle hubs.

While shopping centres across much of the Western world continue to shutter, India’s retail real estate story is moving in the opposite direction. According to insights from real estate consultancy Anarock, India has emerged as a standout performer at a time when the United States and other developed markets are grappling with prolonged mall closures and rising vacancies.

Since 2020, the US retail landscape has seen a net closure of close to 1,200 mall-based stores. Escalating vacancy rates have left nearly 40 per cent of underutilised malls facing the prospect of redevelopment or conversion to alternative uses. In contrast, India’s retail segment is experiencing a resurgence, supported by robust consumer spending and strengthening confidence among both domestic and global investors.

This optimism is increasingly visible in investment flows. Anarock estimates that Indian shopping malls could draw more than $3.5 billion in capital over the next three years. Anuj Kejriwal, CEO for Retail Leasing as well as Industrial and Logistics at Anarock Group, noted that more than 88 international brands have already entered the Indian market and are now pursuing rapid expansion. Several additional global players are also preparing to enter, although their growth ambitions are constrained by the limited availability of high-quality, Grade-A retail assets.

A key driver behind India’s retail appeal is the country’s demographic and structural advantage. Anarock highlighted that organised retail space in India remains scarce, with per-capita retail stock far lower than in mature markets such as the US or China. This shortage has become more pronounced as India’s per-capita income has nearly doubled over the past decade, creating a sharp imbalance between demand and supply that is rarely seen in global retail markets.

The impact of this mismatch is evident in operating metrics. Premium malls across major Indian cities are functioning at near-full capacity, with occupancy levels typically ranging from 95 to 100 per cent. Rental values have not only recovered from the pandemic-era slowdown but are now consistently exceeding pre-2020 levels. Kejriwal pointed out that leasing activity in top-tier malls is progressing faster than new construction—an uncommon scenario even in high-growth retail markets.

Indian malls have also redefined their role, positioning themselves as lifestyle and social hubs rather than purely transactional shopping spaces. Footfall data underscores this shift, with weekday visitor numbers often exceeding 20,000 and weekend traffic crossing 40,000. Entertainment offerings, food courts, and dining destinations account for roughly 30 to 35 per cent of total foot traffic, reinforcing malls as centres for leisure and community engagement.

Another factor supporting physical retail is India’s relatively low level of online shopping penetration. E-commerce currently accounts for about 8 per cent of retail sales in the country, significantly below the 20 per cent or higher levels seen in the US and China. This allows brick-and-mortar stores to coexist with digital platforms, often benefiting from omnichannel strategies rather than being displaced by them.

Looking ahead, Anarock expects India to evolve into a $6 trillion consumption-driven economy by 2030. This trajectory is likely to cement the country’s position as one of the most attractive long-term markets for global retailers and institutional investors seeking sustained growth in an otherwise challenging global retail environment.