India’s travel retail market set to hit $1.8b by 2030

It is on track to become the world’s third-largest air travel market by 2030.

India is rapidly becoming a major player in global travel retail, driven by rising disposable incomes, a booming aviation sector, and increased international travel, according to a report by Kearney.

The country’s travel retail market is projected to grow from its current size to nearly $1b by 2030. In a more aggressive growth scenario, it could reach $1.8b, with a CAGR of up to 19%. By 2035, India could match today’s travel retail volumes of markets like Türkiye, the UAE, and Thailand.

The average monthly per capita spending has more than doubled from $29 in 2019 to $62 in 2024.

Air passenger traffic grew by 5% over the same period and is expected to grow at 9% CAGR through 2030, reaching over 745 million passengers annually.

The report said that India is on track to become the world’s third-largest air travel market by 2030.

The number of operational airports in India has more than doubled from 74 in 2014 to 159 in 2025. The government aims to increase this to 350–400 by 2047. More than $10.7b has been invested under the UDAN scheme to expand air connectivity.

Airlines are also scaling to meet demand. Air India and IndiGo have ordered over 1,000 Airbus aircraft to expand long-haul services.

Airport retail is moving from fragmented duty-free shops to structured, experience-driven formats. Key players like Ospree Duty Free (Adani-Flemingo) and Delhi Duty Free Services (GMR-Aer Rianta International) are leading the shift.

International operators like Avolta and Gebr. Heinemann are also entering, bringing premium offerings and global partnerships.

Retail spaces are increasingly controlled by airport groups through joint ventures, allowing tighter control over the shopping experience.

India’s travel retail consumers are price-sensitive, with about 50% planning purchases in advance and expecting lower prices than at home.

Millennials and Gen Z prefer exclusive products, premium packaging, and strong brand stories. They rely on digital tools like click-and-collect, mobile payments, and price comparison apps.

Despite this, 80% still value in-person interaction with store staff—well above the global average.

Liquor is the top-selling category, making up 58% of duty-free sales, followed by cosmetics, fashion, electronics, and local products.

Still, the market faces several hurdles. Regulatory inconsistencies across airports, low duty-free allowances, and high import taxes create a challenging business environment.

Current duty-free limits—INR 50,000 in goods, two liters of alcohol, and 100 cigarettes—have remained unchanged since 2016, despite increases in travel and income.

In addition, the logistics network outside of airports is under strain, making it harder for retailers to scale effectively. High operating costs tied to the minimum annual guarantee model also reduce flexibility and discourage experimentation with new formats or smaller brands.

Looking ahead, five major growth frontiers will shape the next phase: expanded retail zones, deeper digital engagement, broader product categories, stronger brand collaborations, and better integrated passenger experiences.

The report said capturing these opportunities will require coordinated action from a “pentarchy” of key players—governments, airport operators, airlines, retailers, and brands.

Early movers who invest in partnerships and innovation will be best positioned to lead as India’s travel retail market moves into its next stage of explosive growth.