Tier-2 and Tier-3 cities are emerging as the next major drivers of India’s consumption growth, with the affluent population in these markets increasing by 76 percent over the past six years, according to the Urban Bharat – India’s Consumption Story report released by Kantar and DB Corp.
The report highlights a shift in consumption patterns beyond metropolitan markets, driven by rising affluence, digital adoption and aspirational spending. It identifies opportunities across 11 high-growth sectors, including automobiles, personal finance, e-commerce, education and FMCG.
The study also introduces the Urban Bharat City Opportunity Index, which ranks the top 50 cities with the highest potential to drive India’s next phase of consumption growth. The index is designed to help businesses make investment, expansion and marketing decisions based on data-driven insights.
According to the report, nearly one in three urban Indians now lives in Tier-2 and Tier-3 cities, making them one of the country’s fastest-growing consumption markets. The share of affluent (NCCS A) households has increased from 26 percent to 40 percent over the past six years, while 33 percent of the population is below the age of 24, indicating strong demand from a young and aspirational consumer base.
The report also notes that digital adoption continues to reshape consumer behaviour, with digital payments, banking, investments and e-commerce becoming increasingly mainstream. Around one in three consumers in these markets now shops online, reflecting growing omnichannel engagement.
Education has also emerged as a priority, with more than 27 percent of households spending over 10 percent of their income on education, signalling a focus on long-term aspirations and upward mobility.
Biswapriya Bhattacharya, Director, B2B & Technology, Kantar, said, “Urban Bharat is rapidly becoming one of India’s most important consumption growth markets, beyond the metros. As affluence rises and a younger, aspiration-led consumer base drives demand across categories, businesses have an opportunity to rethink where future growth will come from. The Urban Bharat report provides brands with robust, evidence-based insights to better understand evolving consumer behaviour, identify emerging opportunities and make more confident decisions across innovation, investment and market expansion.”
Girish Agarwal, Director, Dainik Bhaskar Group, said, “For years, marketers have looked at Bharat through the lens of metro India, often relying on assumptions due to the absence of credible market intelligence. That reality has changed. Today, cities like Jaipur, Lucknow, Surat and Indore are emerging as powerful consumption hubs. Consumers across Tier-2 and Tier-3 India are highly aspirational, digitally connected and increasingly willing to spend across categories. Through this joint initiative with Kantar, our objective is to equip marketers, media planners and businesses with robust insights that help them identify where India’s next phase of growth will come from.”
