What: Retail leasing in India's top 8 cities surges 55% year-on-year, driven by international brand entries and strategic infrastructure development, despite challenges in smaller markets.

Why it is important: This growth trajectory aligns with India's projected evolution into a $2 trillion retail market by 2033, while the contrasting performance between major cities and smaller markets reveals critical insights for future retail development strategies.

India's retail real estate sector is experiencing remarkable momentum, with leasing activity in the top eight cities surging 55% year-on-year. This growth is particularly evident in major metropolitan areas, where international brands are establishing significant presence, with Delhi-NCR emerging as the preferred destination for over half of new entrants. The expansion is supported by strategic infrastructure developments and improved supply chain efficiency through Free Trade Warehousing Zones. However, the market presents a nuanced picture, with smaller cities facing challenges as evidenced by increasing vacancy rates in some locations. The retail landscape is further evolving through the integration of immersive shopping technologies and sustainable practices, reflecting changing consumer preferences. This transformation is reshaping India's retail sector, with European retailers, particularly from France and Italy, leading the international brand influx and contributing to the market's sophisticated evolution.

IADS Notes: Recent market data provides comprehensive context for India's retail leasing surge. In February 2025, reports confirmed 27 new international brands entering the market, with Delhi-NCR emerging as the preferred destination for over half of these retailers. This expansion is supported by strategic infrastructure developments, including Free Trade Warehousing Zones that enhance supply chain efficiency and improve connectivity to major industrial clusters. However, the growth story presents contrasting narratives across different market tiers. While luxury retail secured approximately 190,000 square feet throughout 2024, smaller markets face challenges, evidenced by the increase in "ghost malls" from 57 in 2022 to 64 in 2023. The market's evolution is further shaped by Coresight Research's identification of key trends, including expansion to Tier 2+ cities and focus on immersive shopping technologies. This complex landscape suggests that while overall leasing activity remains robust, success increasingly depends on strategic location selection and alignment with evolving consumer preferences.

Retail leasing surges 55% year-on-year in top 8 Indian cities