India’s retail supply chain is to gain $3.5bn as investors pivot from declining US malls to India’s high-yield market.
While Western retail markets face a structural crisis, global capital is pivoting towards a market-defying global trend: India. While the United States have seen a net closure of nearly 1,200 mall stores since 2020, with rising vacancies forcing almost 40 percent of empty malls into repurposing, India is experiencing a retail resurgence driven by robust consumer demand and institutional investor confidence.
Latest data from ANAROCK Research & Advisory indicates that Indian malls are set to receive over $3.5 billion in capital inflows by 17 December 2028. Since 2021, more than 88 foreign brands have entered the Indian market, seeking aggressive expansion within the restricted supply of Grade-A assets.
A primary driver for this shift is the extreme undersupply of quality retail space. India’s per capita retail stock remains among the lowest globally:
- Tier 1 Cities: 4 to 6 square feet per person.
- Tier 2 & 3 Cities: 2 to 3 square feet per person.
- Grade-A Malls: Barely 0.6 square feet per capita (compared to 23 square feet in the US and over 6 square feet in China).
Anuj Kejriwal, CEO of Retail Leasing and Industrial & Logistics at ANAROCK Group, noted that per capita income has nearly doubled in the last decade, creating a mismatch where Grade-A malls report 95–100 percent occupancy. Consequently, leasing cycles are currently outpacing construction cycles.
Indian malls are evolving into lifestyle destinations anchored in entertainment and dining, which now account for 30–35 percent of footfalls. This “phygital” approach, combining physical experience centres with online scale, has kept the sector resilient. While US e-commerce penetration exceeds 20 percent, India remains around 8 percent, with direct-to-consumer brands reporting that offline conversions are two to three times higher than online.
Indian Grade-A malls typically deliver Internal Rates of Return (IRRs) of 14–18 percent, nearly double the yields seen in many Western markets.
- Institutional Benchmarks: Of over 600 operational malls, fewer than 100 meet the standards for global funds.
- REIT Evolution: Following the 2023 listing of the Blackstone-backed Nexus Select Trust, at least two more retail Real Estate Investment Trusts are expected by 2030.
By 17 December 2025, retail leasing in India had risen almost 70 percent year-on-year, while new mall supply grew by over 160 percent, signalling a long-term growth trajectory for the national supply chain and retail economy.
SOURCE – PR
