While malls in the US and Europe struggle with closures and declining footfalls, India’s retail market is attracting global attention, with investors pouring in billions of dollars. According to Anuj Kejriwal, CEO of Retail Leasing and Industrial & Logistics at ANAROCK Group, India is expected to see over USD 3.5 billion in capital inflows into retail over the next three years, as foreign brands and institutional investors flock to the market.
Since 2021, more than 88 international brands have entered India, with several others scouting for space in Grade-A malls that are in extremely short supply. This surge comes as Western countries face a retail crisis. In the US alone, about 1,200 mall stores have shut down since 2020, and nearly 40% of empty malls are being repurposed or rezoned to adapt to falling demand.
The contrast could not be starker. India’s retail stock per capita remains among the lowest globally. In Tier-1 cities, people have just 4-6 square feet of retail space per person, while in Tier-2 and Tier-3 cities, it is only 2-3 square feet. Grade-A malls account for barely 0.6 square feet per person, compared with 23 square feet per capita in the US and more than 6 square feet in China. This extreme undersupply is fueling demand and keeping occupancy rates near full in most premium malls, with many zones having waitlists for new tenants.
A key factor driving India’s retail growth is its demographic and economic trajectory. The country is on track to become a USD 6 trillion consumption economy by 2030, supported by a young population, rising incomes, and rapid urbanisation. Malls are becoming lifestyle destinations, offering entertainment, dining, and social experiences alongside shopping. In major malls, daily footfalls routinely exceed 20,000 on weekdays and surge beyond 40,000 during weekends. Food and entertainment now account for 30-35% of visitor traffic, helping malls remain resilient even as e-commerce grows.
Unlike in the West, Indian malls have largely benefited from e-commerce rather than being disrupted by it. With e-commerce penetration around 8%, much lower than the 20% plus levels in China and the US, physical stores act as experience and trust-building centers, while online channels help brands scale. Many D2C brands report that offline stores achieve 2-3 times higher conversions than online channels, highlighting the continued relevance of brick-and-mortar retail.
Grade-A malls in India also offer strong returns for investors. Institutional-grade retail assets typically deliver internal rates of return between 14% and 18%, almost double the yields seen in Western markets. Rising incomes, low vacancies, long-term rental escalation agreements, and consumption-linked revenue-sharing models provide both stability and upside potential.
The success of retail-focused REITs has further boosted investor confidence. Blackstone’s Nexus Select Trust, which listed in 2023, owns a portfolio of 19 malls with over 1,000 brands and generates an annual net operating income of INR 1,600 crore. It helped demonstrate that professionally managed retail assets in India are transparent, scalable, and capable of delivering predictable cash flows. With two more retail REITs expected to enter the market by 2030, the sector is becoming increasingly institutionalised.
The limited supply of quality retail space, coupled with strong brand demand, has also led to faster leasing cycles. Developers now find that signing tenants is often quicker than completing construction—a rare phenomenon globally. Retail rentals have consistently surpassed pre-pandemic levels, showing that India’s malls are not just surviving but thriving.
“The Indian retail market is unique globally,” Kejriwal said. “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% year-on-year in the first half of 2025, with new mall supply increasing over 160%.”
As global capital seeks yield and long-term growth, India’s retail story stands out as a bright spot in an otherwise uncertain global mall environment. The country’s young population, rising consumption, and extreme scarcity of high-quality retail space create a perfect storm of opportunity for both international brands and investors.
