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India’s retail real estate sector entered 2026 in a healthy position. Organised retail is expanding across metros as well as tier two and tier three cities, with leading brands opening more stores in emerging markets. Good malls remain popular weekend spots for urban consumers, while high streets continue to attract premium shoppers.
“As India aligns more closely with global trade ecosystems, this phase presents both opportunity and adjustment for Indian retail, which must remain rooted in domestic consumption realities while adapting to a more competitive international environment,” says Anuj Kejriwal, CEO Retail Leasing and Industrial and Logistics at ANAROCK Group.
The new India EU trade agreement will gradually make it easier and cheaper for fashion, lifestyle and food brands to trade between the two regions. This is likely to bring more international labels into Indian malls while also opening export opportunities for Indian brands. At the same time, it introduces competitive pressures for domestic retail players across cosmetics, spirits, premium food, apparel, textiles, leather and consumer goods, where global brands may now compete at lower costs due to reduced tariffs.
Trade agreements also bring compliance requirements related to quality, labelling, REACH regulations, fire safety, sustainability and ethical sourcing. These can increase costs for Indian exporters seeking to benefit from preferential tariffs. Rules of origin certification, logistics complexities and the potential threat of carbon tariffs may further strain supply chains, particularly for small retailers and MSMEs.
In this context, the retail sector looks towards Union Budget 2026 to create a more equitable business environment. While the Budget cannot resolve all structural challenges, it can fine tune taxes, duties, incentives, and public spending to make doing business easier, stimulate consumption and support expansion into smaller cities.
Andre Eckholt, Managing Director Hettich India SAARC Middle East and Africa, shares a similar expectation. He points out that as India moves towards becoming a global manufacturing hub, sectors such as furniture and manufacturing need relief from rising raw material and logistics costs through rationalised duties, stable input costs, incentives for value added manufacturing and continued focus on infrastructure and ease of doing business.
Sumit Agarwal, Co Founder and CEO, Vyapar, adds an MSME and compliance perspective to these expectations. He highlights that MSMEs need simplicity, liquidity and stable technology enabled compliance frameworks rather than complex policy announcements. According to him, accelerating digital adoption in invoicing, bookkeeping, GST compliance and tax management can reduce friction, improve credit assessment, enable faster access to working capital and ease export related regulatory challenges for small businesses.
Where The Market Stands
The Indian retail real estate sector clearly shows a divide between leaders and laggards. Well located and professionally managed malls with strong brand mix, food and entertainment options and safe environments are performing strongly. Older or poorly designed centres with access and parking issues are losing relevance as consumers prefer better destinations or shift to online buying.
A major shift is visible in the rise of smaller cities. Retailers are pursuing these markets through physical stores, franchise formats and dark stores that support online delivery. This is influencing the nature of retail developments, with increased focus on mid sized shopping centres, retail warehouse hubs, and projects linked to transport corridors.
Tax Expectations From The Budget
Retailers expect practical tax adjustments that stimulate demand without affecting fiscal balance.
- Slight GST reduction on affordable apparel, footwear and daily consumption goods can help organised retail compete with the informal sector and support demand in smaller cities.
- Clearer input tax credit rules for developers on fit outs, common areas, and professional services can reduce project costs and encourage better quality retail developments.
- Modest income tax relief for consumers can boost discretionary spending across fashion, electronics, and food services.
Infrastructure That Enables Retail Growth
Retail growth is closely linked to connectivity and mobility.
- Continued metro, rail, highway and airport expansion creates new retail catchments.
- Encouraging sustainable retail developments through incentives or faster approvals can promote future ready malls.
- Stronger digital and logistics infrastructure, especially in tier two and tier three cities, can help retailers adopt genuine omnichannel operations.
Supporting Brands, MSMEs and Supply Chains
Malls and high streets are only as strong as the brands and manufacturers within them.
- Incentives for labour intensive sectors such as apparel, footwear, leather and lifestyle products can strengthen domestic brand presence and generate employment.
- Better credit access and working capital support for MSMEs supplying to organised retail can ease financial stress.
- Simplified digital and export compliance systems can allow Indian brands and MSMEs to use retail spaces as showrooms for global buyers under the new trade framework while reducing regulatory burden.
As highlighted by Anuj Kejriwal of ANAROCK Group, the emphasis going forward will be on efficiency and quality assets that can convert policy support and increased consumption into stronger performance.
A Global Outlook With Indian Foundations
Post the India EU trade deal, Indian retail real estate stands at the threshold of becoming more global while remaining deeply rooted in Indian consumption behaviour. Successful malls will be those that combine accessibility, safety, experience and a balanced mix of domestic and international brands.
The retail sector now looks to Union Budget 2026 to create a predictable and supportive environment where quality assets, efficient operators, serious retailers and empowered MSMEs can continue to grow steadily.
