While malls in western countries of the world brace for an existential crisis, India is witnessing retail resurgence, driven by strong consumer demand and growing institutional investor confidence, promising shopping malls surge in 2026 and beyond.

 Latest ANAROCK data shows that in next 3 years, Indian malls are set to see over USD 3.5 billion of capital inflows. Meanwhile, 88+ foreign brands have entered the Indian retail market and are seeking to expand aggressively. Several more global brands are in the pipeline, seeking space in the severely restricted Grade-A assets currently available.”

 As a sharp counterpoint to Western countries’ markets, India’s massive unmet demand from a young consumer base and limited organized retail competition, backed by supportive FDI policies, are exactly what foreign brands and investors now seek.

A major confidence driver is the extreme undersupply of quality retail space in the country. India’s per capita retail stock remains one of the lowest in the world – Tier 1 cities operate with just 4 to 6 sq. ft. per person, Tier 2 and 3 cities with 2 to 3 sq. ft., and Grade A mall space alone sits at barely 0.6 sq. ft. per capita. In contrast, the US averages close to 23 sq. ft. while China exceeds 6 sq. ft.

“This gap, combined with India’s per-capita income nearly doubling in the last decade, has created a demand–supply mismatch virtually unheard of in global retail. Grade-A malls are running near-full occupancy, reporting 95-100% occupancy with long waitlists for key zones. Rental growth has consistently surpassed pre-pandemic levels, and developers now find leasing cycles outpacing construction cycles – a rarity anywhere in the world”, says Anuj Kejriwal, CEO & MD Anarock Retail.For investors seeking predictable, inflation-hedged cash flows, this imbalance is a compelling long-term opportunity.

With its rare combination of demographic demand drivers, India’s consumption story is creating new headlines. The country is on track to become a USD 6 trillion consumption economy by 2030. Unlike their Western counterparts, Indian malls are lifestyle destinations anchored in entertainment, dining, and social experiences, attracting significant daily footfalls.  F&B and entertainment now account for 30–35% of footfalls, resulting in a resilient retail mix almost completely immune to the online retail disruptions that are defeating Western malls.

India has over 600 operational malls, but less than 100 meet the institutional benchmarks that attract global funds – triggering aggressive competition for top-tier assets.“With its 19 malls’ portfolio housing 1,000+ brands and generating INR 1,600 Cr in annual NOI, Blackstone’s Nexus Select Trust REIT listing in 2023 kick-started retail-led REITs in India. “It established the sector’s credentials as a transparent, scalable, and professionally managed asset class. By 2030, at least two more retail REITs are expected to enter the Indian market”,says Kejriwal.

Among the most attractive dynamics for global investors is that Indian malls have not capitulated to e-commerce – they are, in fact, benefiting from it. India’s e-commerce penetration remains around 8%, far below the 20%-plus levels seen in China and the US. Brands here are increasingly going ‘phygital’, with offline stores now experience and trust-building centers while online platforms drive scale.Many leading D2C brands report that offline conversions are 2-3 times higher than online. In India, physical retail has retained its relevance in a digital age.

Indian Grade-A malls typically deliver 14-18% IRRs, almost twice the yields seen in many Western markets. Rental escalation cycles, consumption growth-linked revenue-sharing arrangements, and consistently low vacancies signal stability and upside for global capital seeking both yield and long-term growth.This renders India unique among the world’s leading retail markets where retail leasing grew 70% YoY and mall supply grew by over 160% in the first half of 2025. And with Indian retail market having limited quality supply, rising incomes, heavy footfalls, and rapid brand expansion,malls are set for resurgent times in 2026 and beyond.