top of page

By:

C.S. Krishnamurthy

21 June 2025 at 2:15:51 pm

Investing in India’s Consumption Story

As India’s 1.4 billion consumers trade thrift for aspiration, private consumption now drives nearly 60 percent of the GDP, fuelling a transformation that investors can scarcely afford to ignore. Think about your own life over the past five years. You would have probably ordered food from Swiggy, bought something on Amazon or Flipkart, upgraded your phone, or subscribed to Netflix or Spotify. Your parents might have bought an air-conditioner or even a new car. Someone in your family has likely...

Investing in India’s Consumption Story

As India’s 1.4 billion consumers trade thrift for aspiration, private consumption now drives nearly 60 percent of the GDP, fuelling a transformation that investors can scarcely afford to ignore. Think about your own life over the past five years. You would have probably ordered food from Swiggy, bought something on Amazon or Flipkart, upgraded your phone, or subscribed to Netflix or Spotify. Your parents might have bought an air-conditioner or even a new car. Someone in your family has likely swapped the local kirana shop for a mall or a quick-commerce delivery app. None of this is accidental. It is the power of consumption that is quietly redefining India’s economy. The word ‘consumption’ may sound academic or technical, but it is simple. It is everything we buy - from morning chai to an OTT subscription, from vegetables to smartphones, from medicines to clothes. Every rupee you spend is consumption, and in India, we are spending more than ever before. Private final consumption expenditure has become the principal engine of growth, cushioning the economy against global shocks and export slowdowns. In an era when manufacturing and exports face headwinds, domestic demand has emerged as India’s most reliable growth driver. In short, India’s economy is not just about factories or exports. It thrives on what 1.4 billion people choose to buy every day.  Here is the kicker: private consumption now makes up nearly 60 percent of India's entire GDP. Changing demographics India sits at a demographic inflection point. A huge chunk of our population is young, working, and earning decent salaries. Unlike countries like Japan or Italy where populations are aging and shrinking, India’s workforce is young, expanding and ambitious. More people working means more money coming in, which mean more spending. But it is not just about numbers. It is about what people are spending on. A generation ago, most families spent their income on basics - food, rent, and school fees. Today, after meeting essentials, they still have something left. That extra money is transforming the way India lives. We are buying cars, air tickets, branded clothes, health insurance, gym memberships, expensive coffee and taking foreign vacations. This shift from ‘need’ to ‘want’ is what economists get excited about - a sign of a society that is not just surviving but thriving. Between 2020 and 2024, consumer spending jumped by more than 30 percent. By 2030, the number of Indians able to afford discretionary purchases will have risen by half. Per-capita income, now around $2,800, is projected to approach $4,000 within a few years. In real terms, that would push tens of millions into the ‘consuming class,’ that is households earning enough to influence not just local markets but global corporate strategies. India is poised to become the world’s third-largest consumer market by the end of the decade, trailing only China and the United States. Automobiles are flying off the lots, especially in smaller cities. Two-wheelers and electric vehicles are joining the mainstream. Fast-moving consumer goods form the steady heartbeat of the economy. E-commerce has become second nature, driven by digital payments and doorstep delivery. Financial products are spreading: more Indians hold credit cards, mutual funds and insurance. Healthcare, diagnostics and wellness apps are thriving. Restaurants, OTT platforms and tourism are booming as Indians increasingly value experiences as much as possessions. The beauty of this boom is its breadth. From a packet of Parle-G to a BMW, both feed the same consumption engine at different ends of the spectrum. And unlike earlier cycles, the surge is not confined to big cities. Tier-2 and Tier-3 towns from Surat to Siliguri now power demand for everything from smartphones to SUVs, creating a geographically diverse and durable growth base. Investor’s opportunity For investors, the implications are clear. Firms catering to domestic consumers - from soap-makers to smartphone vendors - enjoy a vast and resilient market. Over the past two decades, consumption-linked companies have consistently outperformed others, because people keep buying even in downturns. One way to tap into this momentum is through thematic mutual funds that focus on consumption. Such funds spread investments across sectors, reflecting the diversity of consumer demand. For newcomers, they offer an easier, less risky way to benefit from the theme without having to pick individual stocks. Yet patience is crucial. Consumption booms unfold gradually, occasionally tempered by inflation or shifting tastes. Over the long term, however, the trajectory remains upward. Investing in India’s consumption is, in effect, investing in its people—millions of households aspiring to a better life. It is also an implicit bet on stability: on incomes rising, cities expanding, and policy remaining supportive of domestic enterprise. This theme suits young investors seeking long-term growth, planners saving for retirement or education, and those looking to diversify through exposure to multiple industries. It rewards discipline and a long-term mindset rather than speculation. Consumption is not merely an economic statistic but the pulse of a changing nation. Every time someone buys a first smartphone, books a flight, or steps into a mall instead of a roadside stall, they participate in India’s transformation. For investors and policymakers alike, one truth stands out: India is not just producing or exporting more but  spending  more. And where its people spend, growth inevitably follows. (The writer is a Bengaluru-based freelancer. Views personal.)

Ayurveda 2.0: The Next Frontier of Skincare

The modern consumer wants clean, multi-functional skincare that delivers both performance and purpose.

ree

As the global beauty industry shifts towards clean, sustainable, and ethical products, India’s ancient wellness system – Ayurveda – is staging a quiet revolution. Once confined to traditional herbal remedies, Ayurveda is now poised to transform the booming world of skincare products by offering a compelling blend of beauty and therapeutic wellness.


This World Ayurveda Day, it's time to recognise the new frontier: Ayurveda 2.0—where skincare and personal care meet wellness, naturally.


Conscious Skincare

Millennials and Gen Z are redefining beauty standards. No longer content with chemically loaded, synthetic-laden products, they’re seeking clean, cruelty-free, and multi-functional solutions. This has created a massive opportunity for Ayurvedic brands to offer innovative skincare and personal products.


Ayurveda seamlessly aligns with this new-age demand. Unlike conventional skincare, which often prioritises quick fixes over long-term health, Ayurvedic formulations offer therapeutic value with every application. They work with the skin's natural biology to promote balance and health from within.


The line between skincare and overall wellness is blurring. Consumers no longer want "just" a cream or serum, but they want hybrid solutions that offer performance with purpose. This is where Ayurveda truly shines.


Ayurvedic brands are already innovating with UV-protective face creams that hydrate and shield. Shampoos that tackle dandruff while enhancing shine, as well as shower gels infused with potent herbs for skin health, are also entering the market. These are not just a trend, but they're the future. The global market is paying close attention to these effective and holistic solutions.


Ayurvedic Skincare

Ayurvedic solutions are crucial for long-term skin health because they focus on treating the root cause of skin issues, rather than just the symptoms. Instead of relying on harsh chemicals that can provide temporary results, Ayurvedic principles use natural ingredients to nourish and restore balance.


This approach acknowledges that skin health is intrinsically linked to internal well-being and environmental factors. For example, instead of drying out acne with harsh treatments, Ayurveda uses herbs like neem or turmeric to purify the blood and reduce inflammation. This holistic approach leads to clearer, healthier skin over time.


By promoting harmony within the body, Ayurvedic skincare helps the skin maintain its own health, making it more resilient and radiant over time.


The issues

While Ayurveda enjoys immense trust for its safety and holistic benefits, it faces a few hurdles before it can fully claim its place in the global skincare arena.


One of the biggest issues is standardisation. The potency of herbs and botanicals can vary by season, soil quality, and geography, making consistency a real challenge. Natural ingredients can also be prone to microbial growth and have shorter shelf lives.


These are not flaws, but they’re features of truly natural products. Still, consumers conditioned by the flawless aesthetics of synthetic cosmetics may take time to adapt.


Plant-based, water-rich, or oil-based formulations are prone to microbial growth without strong preservatives. Limited use of synthetic stabilisers leads to a shorter shelf life compared to conventional cosmetics.


Yet, as industry experts point out, these challenges are not insurmountable; they’re invitations for scientific innovation. The next phase of Ayurvedic beauty must blend tradition with modern R&D to ensure efficacy, safety, and stability without compromising authenticity.


The Ayurvedic personal care space is becoming increasingly crowded. Many brands loosely incorporate “Ayurvedic” elements as a marketing strategy, adding a dash of turmeric or a hint of sandalwood without genuine formulation expertise. This is both a risk and a remarkable opportunity.


As the category matures, brands with deep Ayurvedic legacies, proven expertise, and research-backed formulations will stand out. The demand for authentic, holistic, and effective Ayurvedic brands will be on the rise.


In conclusion

Ayurveda is not just a system of healing; it’s a philosophy of living in harmony with nature. In a world grappling with climate change, chemical overload, and rising skin sensitivities, this philosophy is more relevant than ever.


The future of Ayurveda in skincare isn’t about replacing modern products; it’s about enhancing them. With the right investments in science, safety, and storytelling, Ayurveda is uniquely positioned to lead the global wellness beauty movement, not as a trend, but as a timeless tradition reimagined for today. On this World Ayurveda Day, let’s celebrate not just what Ayurveda was but what it is becoming.


(The writer is the co-founder and managing director of RESHMONA Pharmaceuticals. Views personal.)

Comments

bottom of page