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India’s retail landscape is witnessing a transformation, one that’s shifting the spotlight from over saturated metro cities to the emerging and promising tier-3 and tier-4 towns. While malls in metro and tier-1 cities continue to thrive, they face rising real estate costs, intense competition, and a maturing consumer base. In contrast, smaller towns are emerging as high-potential growth markets with a fresh appetite for organized retail.
The surge in demand is driven by several key trends: rising disposable incomes, aspirational lifestyles, and the growing influence of digital media and e-commerce, which have exposed consumers in these towns to global brands and urban experiences. Residents in cities like Bhubaneswar, Ludhiana, Jalandhar, Raipur, Coimbatore, Indore, and even smaller clusters like Ujjain, Muzaffarpur, and Nizamabad are now seeking the same mall culture that urban dwellers have enjoyed for years—air-conditioned shopping spaces, food courts, entertainment zones, branded stores, and a secure, family-friendly environment.
For mall developers and retailers, this shift presents an opportunity to tap into a rapidly growing customer base that is brand-aware, digitally connected, and eager for modern retail experiences. Moreover, the lower cost of land and construction, along with supportive local governance and improved infrastructure, make these towns commercially viable for long-term investments.
According to a Deloitte–Shopping Centre Association of India (SCAI) report, India’s shopping centre industry is expected to grow at a compound annual growth rate (CAGR) of around 17% from 2022 to 2028. This growth will be fueled not just by major metros but increasingly by these smaller towns, which are fast becoming economic engines in their own right. As this transition happens, malls in India are evolving beyond traditional retail—they're becoming lifestyle destinations, social hubs, and local landmarks that define the aspirations of Naya Bharat.
Key Players in the Indian Mall Expansion
Several major developers and retail brands are leading the charge in the Indian mall expansion. Companies such as DLF, Phoenix Mills, Prestige Group, Inorbit Malls and Nexus Malls have been instrumental in creating and managing some of the largest shopping complexes across the country.
In an early April 2025 interview with PTI, Nexus Select Trust Chief Operating Officer (COO) Jayen Naik said the company remain bullish about the growth in the organised retail sector and also the demand for premium retail real estate space in India.“We have announced acquisition of MBD Neopolis, Ludhiana comprising of aggregate leasable area of 2,55,666 square feet Grade A mall, including the Radisson Blu Hotel MBD, located at Ferozpur Road, Ludhiana from AKM Enterprises Pvt Ltd for a total enterprise value of Rs 490 crore. The deal is likely to be completed within the next two months. This acquisition will help the company in generating an additional rental income of around Rs 40-45 crore per year,” he added.
Asked about the expansion plan in India, he said the company is looking to acquire shopping malls across the country, including northern states .“We are looking for properties in Gurugram and Noida in Delhi-NCR and also other major cities in North India. Our overall target is to double our retail real estate portfolio to 20 million square feet by 2030,” Naik said.
Challenges Faced by the Mall Industry
While the future looks promising for India's mall industry, several challenges remain. One of the biggest hurdles is the competition from e-commerce. The convenience and ease of online shopping have posed a threat to foot traffic in malls, especially in smaller towns and cities.
Additionally, the high cost of real estate, particularly in tier-1 cities, has made it difficult for some developers to deliver affordable retail spaces. The recent economic downturns and global uncertainties also impact consumer spending, further contributing to the vulnerability of malls.
The Future of Malls in India
Despite the challenges, the outlook for malls in India remains positive. Malls are evolving into integrated lifestyle spaces offering much more than just retail. They are increasingly adopting technological advancements like virtual stores, AI-based shopping assistants, and cashless payments to enhance the consumer experience.
Furthermore, as cities expand and more people enter the middle class, there is considerable potential for the development of malls in tier-2 and tier-3 cities, where the retail landscape is still in its nascent stage.
The rise of mixed-use developments—combining residential, commercial, and retail spaces—will further fuel mall expansion. This concept appeals to the growing urban population looking for integrated living spaces that offer convenience and accessibility.
Hence, mall expansion in India is not just a retail trend but a reflection of changing consumer lifestyles and the growth of the middle class. The future of malls will likely see them becoming more than just shopping destinations, emerging as vibrant social hubs and multifaceted community spaces. The ongoing evolution of this sector will undoubtedly shape the future of Indian retail, making it an exciting space to watch.
