India’s retail sector, currently valued at approximately $1 trillion, is projected to nearly double to $1.9 trillion by 2030, with artificial intelligence (AI) emerging as a key driver of this growth, according to Deloitte’s latest report, AI in Retail for the Agentic Era: Aspiration to Action.
The report highlights that AI is no longer a peripheral tool but a core enabler of enterprise strategy. Retailers are moving beyond pilot projects and proofs of concept, embedding AI across operations to manage customer journeys, personalise offerings, and automate supply chains.
Anand Ramanathan, Partner and Consumer Industry Leader at Deloitte India, emphasised: “AI is a catalyst for reimagining retail and the time to lead the re-imagination is now.”
Key Drivers of AI Adoption in Retail
Channel-agnostic shoppers: Consumers increasingly expect seamless integration between online and offline channels. AI enables hyper-personalised engagement across touchpoints.
E-commerce surge: India’s online retail market is projected to reach ₹27 trillion by 2030, with quick commerce and social commerce accelerating AI adoption.
Premiumisation: Growth in super-rich households is expected to drive demand for high-end products and personalised retail experiences.
Urbanisation: With 40% of India’s population expected to live in cities by 2030, urban consumption patterns are reshaping retail strategies.
Gen Z spending: Projected to reach $250 billion by 2025, Gen Z consumers are fueling AI-led, digital-first retail experiences.
AI Use Cases Already in Play
GenAI-powered shopping assistants on e-commerce platforms offering real-time product recommendations.
AI algorithms in food delivery apps providing hyper-personalised meal suggestions.
Retail conglomerates using AI to optimise supply chains and store assortments.
Smart stores and digital twins simulating layouts to boost sales efficiency.
India’s AI spending in retail is expected to triple from $7–8 billion in FY23 to $20–22 billion by FY27, growing at 30–35% annually. Deloitte notes that AI adoption will deliver measurable value across three key dimensions:
Efficiency: Automation and streamlined operations.
Experience: Personalised and seamless customer journeys.
Intelligence: Data-driven insights enabling faster decision-making.
Despite the rapid adoption, retailers face challenges, including high implementation costs, data privacy concerns, and legacy system integration. Deloitte recommends investing in AI-ready infrastructure, fostering cross-functional collaboration, prioritising responsible AI practices, scaling personalisation and automation, and adopting a test-and-learn approach to measure impact.
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