Sameer Mahandru Explains the Travel Retail Economy in India
In the past few years India’s development has led to a dramatic transformation in a lot of sectors; the Indian travel retail market is no different. The sector has been able to generate major revenue, transforming basic shops into retail destinations.
Sameer Mahandru, a prominent voice in the AlcoBev sector, provides insights into the expansion of the travel retail market and factors affecting it.
India’s travel retail market seems to be on a strong growth trajectory, projected to reach USD 2.47 billion in 2025 and expand to USD 6.56 billion by 2030 at a CAGR of 21.59%. At New Delhi’s Indira Gandhi International Airport, non-aeronautical revenue is now 70% of total earnings, with food and beverage, retail and duty-free outlets alone contributing 34%, highlighting the growing importance of retail stores in transit spaces.
“The numbers speak for themselves; the projection of USD 6.5 billion looks promising. This impressive trajectory isn’t driven by a single factor but by a confluence of powerful trends.” Believes Sameer Mahandru.
A rise in disposable income and evolving consumer preference has played an important part in boosting consumer spending, particularly on premium and luxury products. This shift has made travel and shopping at transit points more attractive to a wider population, resulting in high sales.
Retailers have also responded by expanding their offerings, especially in high-end categories, to cater to the aspirations of this increasingly affluent consumer base. There is a clear trend towards premiumisation, especially in categories like wine, spirits, fragrances, cosmetics and fashion accessories.
“Today’s travellers are seeking more than just competitive prices; they crave unique experiences, premium products and immersive shopping environments. The shift from price-focused shopping to experiential and aspirational retail is reshaping the industry, which has made travel retail an indispensable part of India’s economic landscape.” explains Sameer Mahandru.
Along with this shift, there has been a noteworthy surge in both domestic and international tourism. In 2023 alone India welcomed 9.52 million foreign tourists, which was a strong recovery post-pandemic and a 47.9% increase from 2022.
India’s extensive network of 126 active airports (including 11 international and 89 domestic) and extensive railway infrastructure provides a strong foundation for travel retail expansion.
Sameer Mahandru explains, “Strategic tourism campaigns, improved air and rail connectivity and low-cost carriers have made travel more attractive and affordable for many. This increased footfall has then translated to higher demand for retail experience at these hubs.”
The Indian government has also laid a very strong foundation for the travel retail economy with proactive government initiatives and regulatory support. Strategic investments in airport modernisation through schemes like UDAN have given a significant boost to the sector.
Funding of ₹2,400 crore for tourism in FY25 will ensure that the foreign tourist footfall increases, which will eventually lead to thriving retail outlets at airports and other transit hubs.
The future of India’s travel retail sector looks exceptionally promising. With continued investment and strategic focus on travel, tourism, unique offerings and infrastructure, the travel retail economy is set to play a key role in India’s economic growth.
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