India's Modern Grocery Market

India's grocery market is really two markets operating side by side. Understanding the split, and where it's moving, is the first thing any European food brand needs to grasp before deciding how to enter.

A market defined by scale, and by duality

India's retail sector is on track to grow from US$779 billion in 2019 to US$1,41 trillion by 2026, and beyond US$1,8 trillion by 2030, according to Kearney. Food and grocery is the anchor category within it: the one Indians buy daily, regardless of what else they're spending on.

But most of that spending still happens outside anything a European brand would recognise as "retail." Roughly 82% of the market runs through kirana stores, small, family run neighbourhood shops. India has an estimated 13 million of them, the largest network of consumer retail outlets anywhere in the world.

Organised retail (supermarkets, hypermarkets, branded chains, e-commerce) makes up the remaining share, currently around 18%. That's the smaller slice today. It's also the fastest growing one, projected to exceed 35% of the total market by 2030, reaching roughly US$230 billion.

For a European brand, this distinction matters immediately. Kirana stores aren't a realistic entry channel. They run on hyperlocal relationships and cash based supply chains built over generations. Organised retail is where imported, branded, premium products actually get discovered and bought.

What "organised retail" looks like in practice

Within the organised segment, formats vary by city tier and consumer intent:

• Hypermarkets and supermarkets: the broadest reach, led by national chains

• Specialty and premium grocery stores: smaller footprint, higher margin, the natural home for imported categories (more on this in our next piece)

• Shopping mall retail: India's seven largest cities are expected to add 16,6 million sq. ft. of new mall space by the end of 2026, with the majority concentrated in Hyderabad and Delhi-NCR

• Mid sized formats (1.000 to 5.000 sq. ft.): increasingly preferred by retailers themselves, balancing operational cost against brand visibility

Retail leasing has consistently outpaced new mall supply through 2026, a signal that demand for organised retail space, and the brands that occupy it, is running ahead of available real estate.

Nature's Basket Store in Mumbai, an Artisan Pantry, the first concept store

Quick commerce: a third channel, not a subset of e-commerce

It's tempting to treat "online" as one category. In India, it isn't. Quick commerce (10 to 15 minute delivery via platforms like Blinkit, Zepto, and Swiggy Instamart) has become a distinct, fast growing channel of its own, separate from traditional e-commerce marketplaces.

India is now the world's second largest e-retail market by shopper count, with an estimated 270 million online shoppers. Quick commerce is growing within that at a pace few other retail formats match, and grocery is its core category. That makes it directly relevant to any food brand's channel strategy, not just an afterthought.

Image:Bloomberg

Why this matters before you talk to a distributor

A European brand evaluating India often starts with the wrong question: "How big is the market?" The more useful question is: "Which slice of the market can I actually reach?"

The answer, for a premium imported food or confectionery brand, is almost never "all of it." It's a specific, organised, urban slice (supermarkets, specialty grocers, and increasingly quick commerce) that behaves nothing like the kirana dominated 82% underneath it. Getting that distinction right shapes everything downstream: which distributor to choose, which cities to launch in, and which retail format to prioritise first.

Next in this series: which part of that organised slice is actually built for premium, imported products, and what that means for European F&B brands specifically.

OnRoute India helps premium European food brands enter the Indian market, from first conversation to shelf. If your brand is exploring India, contact OnRoute to talk through what a market entry could look like for you.