India’s income pyramid is undergoing a major shift. The share of upper-middle and rich households is projected to rise from 11.1 per cent in 2010 to nearly 24 per cent in 2035, implying that about one in four Indian households will have high discretionary spending capacity.
Rising equities, real estate, and gold are driving the wealth effect that is boosting confidence and purchasing power among affluent households.
This transformation in household economics is set to accelerate consumption growth over the next decade. As more families move into higher income brackets, demand is expected to shift decisively from essentials to lifestyle products, services, and premium brands.
According to the report “Beyond Necessities: India’s Affluence-Driven Growth” by Franklin Templeton, India’s per capita income is projected to nearly double from $1,360 in 2010 to $5,242 by 2031, pushing the country into what analysts call an “affluence trigger zone”.
“With per capita income surpassing US$2,600 in FY2025 and projected to reach US$5,000 by 2030, the share of non-essentials in consumption is expected to rise from 36 per cent to 43 per cent of the overall consumption mix, propelled by premiumisation and the expansion of the middle class,” the report notes.
A long-term behavioural shift supports this outlook. The report notes that discretionary spending has increased from 15 per cent in the 1950s to 36 per cent currently and is expected to rise to 43 per cent by FY2030.
Premium categories are expanding 2-3 times faster than mass-market goods. Premium detergent is growing at 26 per cent CAGR versus 7 per cent for standard variants, while green tea consumption is rising 25 per cent versus 10 per cent for regular tea. A sign that consumers are prioritising quality and brand experience.
The top 20 per cent of households contribute about 85 per cent of overall savings, further reinforcing the spending power of the affluent. With consumption already contributing nearly 60 per cent of GDP, the report expects spending by affluent households to be the key engine of economic expansion in the coming decade.
“The convergence of rising affluence, urbanisation and digital access is setting the stage for a structural uplift in discretionary spending, positioning India as one of the most promising consumer markets globally over the coming decade.” As income rises and financial access widens, the report concludes that India’s growth trajectory is shifting from necessity-led to aspiration-led demand, a transformation powered by an expanding base of affluent consumers.
Published on October 28, 2025
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