Indian retail sector to grow faster, shows 7 per cent sales rise in May: RAI

India’s USD 900 billion retail sector is showing signs of recovery, with 7 per cent sales growth in May 2025, according to RAI. Quick service restaurants and consumer durables led the rise. The industry expects 9–10 per cent growth as festive spending strengthens

New Delhi:The Indian retail sector, currently valued at USD 900 billion, is showing signs of strong recovery and is expected to grow at a faster pace in the coming months, according to the Retailers Association of India (RAI).

The sector, which is currently growing at a rate of 5 per cent, is likely to soon pick up speed and reach a growth rate of 9 to 10 per cent. RAI’s CEO Kumar Rajagopalan said that right after the pandemic, the retail sector had bounced back strongly with a 20 per cent growth rate.

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“However, in the last one year, the growth slowed down to around 5 per cent. Now, with the markets stabilising, consumers spending more, and the right consumer base in place, the sector is once again showing signs of faster growth,” he added.

Meanwhile, as per RAI’s 62nd Retail Business Survey, retail sales across India grew by 7 per cent in May 2025 compared to the same month the previous year.This marks a significant improvement after months of moderate growth ranging between 4 to 5 per cent. Region-wise, southern India led the way with a 9 per cent growth in retail sales in May.

Western India followed with 7 per cent, while northern and eastern regions recorded growth of 6 per cent and 4 per cent, respectively, as per the report. Among the different segments, quick service restaurants (QSR) showed the highest growth at 10 per cent.

Consumer durables and electronics, along with furniture, also performed well with an 8 per cent rise each. Rajagopalan said this increase shows that people are now more willing to spend, especially on non-essential or discretionary items.

Looking ahead, the RAI CEO expressed optimism about the upcoming festive season. He said that the improving consumer sentiment could further boost retail sales and bring the sector closer to double-digit growth in the near future.