In urban households, food and food service expenditures encompassing staples, packaged food, dining out, and alcohol/tobacco are projected to decrease from 42.2% in 2023 to 40.45% by 2030.
Conversely, spending on travel and recreation is expected to rise to 15% by 2030, up from 11.37% in 2023. Similarly, expenditures on health (medical expenses), wellness, fitness, and beauty and personal care are anticipated to swell to 11% of household discretionary spending, compared to 8.72% in 2023.
“This evolution of spending habits marks a clear shift towards higher discretionary expenditure, particularly in urban areas, where convenience, entertainment and comfort are becoming key drivers of consumption,” the report, released on Thursday, said.
India’s rising economy has lifted per capita income above $2,000 in FY25, which is expected to vault past $4,000 by 2030, enhancing consumers’ purchasing power.
By 2030, the number of Indians earning more than $10,000 annually is expected to nearly triple, from 60 million in 2024 to 165 million, reflecting the growth of the country’s middle class and a significant shift towards discretionary consumption.
Rural spending aligns with urban trends
Rural spending is expected to increasingly align with urban trends, with a slight reduction in food expenditure and a shift towards processed foods, dining out and entertainment. By 2030, food spending in rural households is expected to decrease from 51% to 49%, while urban households are expected to see a decline from 42% to 40%.
“The surge in discretionary spending, expanding digital commerce and increasing access to credit are redefining the rules of engagement for brands. By 2030, India’s per capita income is expected to exceed $4,000, unlocking new opportunities across sectors. Businesses have an incredible opportunity to tap into evolving consumer expectations—by balancing affordability, convenience and sustainability while harnessing data and technology to create highly personalised experiences,” said Anand Ramanathan, partner and consumer industry leader, Deloitte India.
Spending on consumer electronics and appliances is expected to grow as aspirational users gain access to financing options, according to the report.
Meanwhile, spending on travel and conveyance is likely to rise, supported by higher incomes from the growing service sector and improved infrastructure. Medical expenses are also likely to increase as health-conscious consumers invest in health-tech and nutrition supplements.
“In summary, discretionary spending in India is expected to continue growing, particularly in consumer electronics, entertainment, travel and health. These sectors are driven by rising incomes, urbanisation and greater access to credit,” the report said.
“India’s discretionary spending is entering a new phase of growth, driven by rising incomes, digital adoption, and evolving consumer preferences,” said Kumar Rajagopalan, CEO, Retailers Association of India, an industry body of online and offline retailers.
Evolving spending habits
Companies have been pointing to a widening range of consumer spending options, leading to a decline in the consumption of traditional goods. Today’s household spending is more diversified, with consumers spending on subscriptions, travel, beauty products, and dining out, a notable shift from patterns seen over a decade ago.
For instance, rural households are now allocating more to conveyance, medical expenses and clothing as a percentage of spends on non-food items, while urban households are spending more on conveyance (14 %), entertainment (11%) and durable goods (11%).
“The increase in conveyance spending reflects a more mobile workforce, as people invest more in leisure travel and seek better employment opportunities. Despite strong growth in discretionary spending, these categories remain under-penetrated compared with other countries, underlining the potential for further expansion as India’s middle class grows. This evolution of spending habits marks a clear shift towards higher discretionary expenditure, particularly in urban areas, where convenience, entertainment and comfort are becoming key drivers of consumption,” according to the report.
