photo courtesy : Gujarat Samachar
NEW DELHI: India’s consumption story has been told through the lens of its biggest metros; Mumbai, Bengaluru, Delhi, Chennai, Hyderabad and Kolkata, for years. But a new consumption map is emerging, and Surat is at the centre of it.
Surat may rank seventh among India’s top consumption markets, but it is the biggest market outside the country’s six megacities. That makes the Gujarat city an important marker of how India’s spending is spreading beyond its traditional metropolitan centres.
With a population nearly the size of a Big Six city and a large concentration of young people, Surat has a $34 billion consumption market, ahead of Ahmedabad and Pune. Its average household consumption is also higher than Bengaluru’s, according to ‘The Many Urban Indias’ report.
This does not mean Mumbai or Bengaluru are being overtaken in absolute consumption. The Big Six still account for 46% of the $844 billion annual consumption across the 100 cities. But Surat shows that India’s biggest consumption opportunities are no longer confined to the traditional metros.
Surat is not alone in standing out on consumption. Chandigarh and Thiruvananthapuram have the highest average household consumption in India, backed by high savings and low debt.
Surat’s rise is part of a wider shift in India’s urban economy. The top 100 cities house less than one-fifth of the country’s population but account for nearly one-third of national consumption, worth Rs 74.5 lakh crore or $844 billion. Household expenditure in these cities has been growing at 10.4% annually, compared with 8.5% for India as a whole.
Within this universe, Surat stands out because it combines a large population with unusually strong household spending.
The city is classified as a “Boomtown” — one of 19 fast-growing cities that also includes Pune, Ahmedabad, Lucknow, Coimbatore, Jaipur, Indore and Vadodara. These cities are becoming the next major pool of consumer markets because they combine sizeable populations with high spending per household.
In fact, the report says Surat, along with Chandigarh, Thiruvananthapuram and Vadodara, has higher per-household spending than the Big Six.
The report says Surat’s pools of middle- and high-income households are not only among the largest in India but also among the fastest growing. It attributes this to the city’s textile-led entrepreneurship, diamond trade and the upward mobility of its migrant population.
Surat’s average household income is also higher than those in Hyderabad, Chennai and Kolkata. Bengaluru and Chandigarh have the country’s highest average household income at around Rs 28 lakh, while cities such as Pune, Thiruvananthapuram and Surat sit ahead of three of the Big Six on this measure.
This is happening as India’s urban middle class expands rapidly. Across the top 100 cities, the share of middle-income households, those earning Rs 6 lakh to Rs 36 lakh annually, has nearly doubled to 53% from 29% over the past decade. By 2030-31, they are expected to account for 60% of households.
The high-income segment is expanding even faster. Households earning more than Rs 36 lakh a year have risen to 12% from 3% over the past decade and are projected to account for nearly one-fifth of households by 2030-31.
Surat is therefore benefiting from exactly the income shift that is reshaping India’s urban consumption.
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