Sep 2014
    market xcel
The Indian Middle Class


India had been and still is portrayed as a mixed economy, though she is leaning towards the model of a free market economy more each year. This can be assessed by reviewing the trend of Indian retail market as the overall retail market in India has grown from US$ 310 Billion (237 Billion Euros) in 2006 to US$ 470 Billion (359 Billion Euros) in 2011 and is projected to reach US$ 675 Billion (516 Billion Euros) in 2016.

The new India has certain dimensions and layers which makes it more distinct. Urban and Rural India are 2 different worlds evolving at different speeds.

The Urban Indian population is broadly categorized in 3 layers, which are Affluent, Middle Class and Poor. The growing middle class in India and their consumption pattern has drawn global attention not only because India is a large market but it is also different from other emerging markets and is growing at a staggering pace.

In India there is no official definition of the middle class. Survey-based studies such as those conducted by the National Sample Survey Organization (NSSO) classify Indian households into different income groups but do not specifically define the middle class, the majority of other studies have used the NCAER data and definitions of the Indian middle class.

Key Characteristics of the Indian Middle Class

Ownership and Consumption

The Indian middle class consumption is driven by consumer goods market. Commodities such as cars and air-conditioners are no longer a luxury items and are now considered as necessities. In fact, small car ownership in India has shown a double-digit growth. This segment’s land and properties account for 51% of wealth, 30% in cash and deposits. Their household savings are mainly to meet emergency needs, healthcare and education costs.


Indian middle class are traditional in their outlook but hey are more receptive and materialistic. They like to experiment things and are also more outgoing. Indian middle class focuses more on savings than spending. Due to the rising demands of the products the middle class segment is very conscious for choosing and buying of products, at the same time they are also very price conscious.

With increasing income the middle class is not only diversifying their consumption baskets with demand in better quality but are also looking at innovation in the products they purchase. There is also an increase in the discretionary expenditure for recreation activities, leisure travel and entertainment.

More >>