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I observe young Indians engaging with luxury brands and local crafts at a bustling town square, showcasing a blend of tradition and modernity. By Sarabjit Singh Puri
Until recently, rural and semi-urban India were perceived merely as consumption hinterlands — agricultural belts, service-reliant zones, or labour contributors to urban economies. That narrative is fast changing. Today, Tier 3 and Tier 4 towns are not only retaining their youth but transforming into aspirational markets, entrepreneurial centres, and fast-growing hotspots for premium and luxury brands.
The Rise of the Modern Landowner
Leading this transformation is a distinct demographic — the modern rural landowner. As per NSSO data, about 30% of rural Indians control nearly 50% of agricultural land. While earlier generations hesitated to diversify beyond agriculture, their successors — educated in top Indian and global institutions, exposed to global trends, and digitally savvy — are steering that legacy in a new direction.
From Farmlands to Fashion and Luxury
Many of these second- and third-generation landowners, with holdings of over 100 acres, are using their capital and ambition to enter modern retail. From Zudio outlets to franchise businesses and even luxury car showrooms, their ventures are reshaping towns like Hoshiarpur (Punjab) and Satna (Madhya Pradesh).
Premium retail, once considered out of reach in such towns, is now not only accessible but thriving. With improving infrastructure and consumer demand, these entrepreneurs see little need to relocate to metros. Instead, they are replicating — and sometimes surpassing — the urban experience back home.
Local Workforce, Local Growth
Government investments in roads, railways, airports, and digital infrastructure — alongside initiatives like Digital India and Skill India — have given rise to a digitally native, college-educated rural middle class. Many now prefer working in their hometowns in retail ventures launched by local entrepreneurs, government establishments, or banks. This has created a positive feedback loop: youth stay, jobs grow, and local economies flourish.
Another force powering this shift is the digitally aware, lower-middle-class rural population. Though not highly educated, they are proficient with smartphones, apps, and online platforms — making them ideal gig workers and frontline staff in these new-age retail ventures. Zudio’s growth in towns like Raipur, Ujjain, and Bhilwara owes much to this workforce.
Three Key Trends Driving Rural Entrepreneurship
- New-Age Startups: Educated youth from rural India are launching tech-enabled, hyperlocal ventures — from solar-powered cold storage to regional fashion brands.
- Reviving Traditional Enterprises: Legacy brands like MDH and Haldiram’s began in small towns. Today, such businesses are scaling through innovation, digital adoption, and IPOs. In 2024 alone, over 10 SME IPOs came from Tier 3 and 4 belts, according to the BSE.
- Fuel for Financial Inclusion: These emerging ventures are accelerating rural formalisation. Be it POS machines, access to credit, or new banking partnerships — small-town entrepreneurs are driving financial inclusion in ways never seen before.
The Power of 7,600 Towns
India is home to around 7,600 census towns, with over 80% in Tier 3 and 4 categories. Acting as economic hubs for 50–100 surrounding villages, these towns contribute 45–50% of India’s national income and will continue to house more than half the population even by 2050.
A rural household earning Rs. 25,000 per month in a Tier 3 town may enjoy a better standard of living than someone earning Rs. 60,000 in a metro, thanks to lower living costs, family-owned homes, and more disposable income. Discretionary spending in these towns is rising fast — in some cases, matching or exceeding that of urban India.
Cracking the Code: Accessibility, Not Affordability
For Urban brands — whether in retail, FMCG, electronics, or luxury — the real challenge in Tier 3 and 4 India is not affordability, but accessibility and insight. Understanding regional nuances, preferences, and behaviour is crucial. That is where rural marketing specialists play a vital role, offering on-ground intelligence that large national agencies often miss.
Tapping into these towns is no longer just a marketing option — it is a strategic necessity. Whether a regional beverage brand aiming to go national or a global fashion house expanding into new territories, the next 100 million customers live here.
The Next India
India’s goal of becoming a $10 trillion economy hinges on activating its rural and semi-urban engines of growth. These towns are not the “rest of India” — they are the next India. From farmlands to fashion stores, and tractors to Teslas, rural India is no longer playing catch-up. It is quietly — and confidently — leading the way.(The author is chairman, Fateh Rural. Opinions are personal.)
- Published On Aug 2, 2025 at 09:29 AM IST
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