The Future of Indian Malls: Why Global Capital Is Betting Big on India’s Retail Revolution

Something interesting is happening in India’s retail world. At a time when malls overseas are seeing muted performance, India is welcoming more shoppers, more brands, and more investment than ever before. The result? A retail boom that global capital doesn’t want to miss.

While malls across the US and Europe grapple with declining footfalls, vacancies, and large-scale closures, India is telling a strikingly different story — one of unprecedented expansion, investor confidence, and consumption-led momentum. Since 2020, the US alone has recorded nearly 1,200 net mall store closures, with almost 40% of empty malls being rezoned or repurposed.

Yet in parallel, India is witnessing a retail boom that is drawing unprecedented global attention, with over USD 3.5 billion expected to flow into Indian malls in the next three years, according to ANAROCK.

This sharp contrast signals a defining moment: India is emerging as the world’s most promising retail destination, and its malls are at the heart of this transformation.

A Market Too Big to Ignore

India’s consumption engine continues to fire on all cylinders. The country is on track to become a USD 6 trillion consumption economy by 2030, propelled by rising incomes, a young demographic, and accelerated urban expansion.

But the real catalyst? A severe undersupply of quality retail space.

• Per capita retail stock in Tier 1 cities: 4–6 sq. ft.
• In Tier 2 & 3 cities: 2–3 sq. ft.
• Grade A mall space nationwide: just 0.6 sq. ft. per capita
• USA averages 23 sq. ft., China 6+ sq. ft.

This glaring supply gap has created one of the world’s strongest demand–supply mismatches. Most Grade A malls in India operate at 95–100% occupancy, with waitlists for prime zones.

“Leasing cycles are now outpacing construction cycles — something unheard of globally,” says Anuj Kejriwal, CEO – Retail Leasing & I&L, ANAROCK Group. “This is why global capital is pivoting to India.”

Over 88 international brands have entered the Indian market between 2021–2025, with several more scouting for space in top malls.

Why Indian Malls Will Thrive Beyond 2026

Unlike Western malls, which struggled against e-commerce, India’s malls have evolved into social and experiential destinations anchored in dining, entertainment, events, and community experiences.

• Weekday footfalls: 20,000+
• Weekend footfalls: 40,000+
• F&B + entertainment: 30–35% of all footfalls

E-commerce has strengthened — not weakened — India’s malls. With online penetration at just 8%, brands increasingly use offline stores for trust, discovery, and experience, while digital drives scale. Many D2C brands report that offline conversions are 2–3X higher than online.

This alignment of digital and physical retail is setting the stage for next-generation, phygital malls.

Where Investors See Big Opportunity

Indian Grade A malls deliver 14–18% IRRs, nearly double the yields in Western markets. With extremely low vacancy and consumption-linked rentals, the asset class offers both stability and upside.

Vision 2026: What the Next Wave of Indian Malls Will Look Like

According to Nishank Joshi, CMO, Nexus Select Malls, 2025 has already shown decisive shifts that will accelerate further in 2026:

1. Digitally Enhanced Mall Ecosystems

• Large-format digital façade screens
• Anamorphic 3D advertising
• Immersive in-mall digital experiences
• Data-backed shopper insights powering precision marketing

“These digital formats are redefining visibility for brands and unlocking strong new revenue streams,” says Joshi.

2. Experience-Led Retail Takes Center Stage

Malls are no longer shopping destinations — they’re social hubs, cultural arenas, and entertainment ecosystems. From gaming zones to luxury dining, experience will define the new competitive advantage.

3. Premiumisation Across Categories

Indian consumers are trading up. Fashion, beauty, electronics, F&B — all seeing a visible shift towards premium and aspirational brands, driving higher profitability for malls.

2026 will bring:

• Integrated loyalty programs
• App-based navigation, reservations, parking, and rewards
• Personalised offers backed by AI
• Seamless digital–physical journeys

5. Sustainability as a Core Pillar

Energy-efficient designs, green certifications, solar-powered infrastructure, and waste management systems will become central to upcoming Grade A projects.

6. Tier 2 & 3 Cities Will Dominate Expansion

With enormous consumption potential and limited organized retail, following are emerging as the next battlegrounds for mall developers and global brands.

• Indore
• Lucknow
• Coimbatore
• Jaipur
• Kochi
• Bhubaneswar
• Nagpur

7. Modern Revenue Models & Brand Partnerships

 “The year ahead promises acceleration — where innovation, customer-centricity, and bold thinking will define how malls grow and how India experiences retail,” Joshi concludes.

As Western malls struggle with oversupply, online cannibalization, and declining relevance, India stands at the cusp of a retail renaissance powered by:

• youth-driven demand
• rising incomes
• limited quality supply
• strong investor appetite
• brand expansion
• experiential consumption

By the next year, customers will be witnessing Indian malls evolving into high-tech, high-engagement, community-first destinations, the heartbeat of the country’s USD 6 trillion consumption story.