If the wealthiest top 10% in India are considered a separate ‘high income’ group – like a massive gated community – they will be an advanced economy much before India becomes a developed country in terms of its gross domestic product (GDP), quality of living etc., says a report on the nation’s economy.
The Indus Valley Report 2025, which analyses the startup ecosystem in India in the context of the post-pandemic economy in the last five years, also looks at the implications of the rise in quick commerce and its impact on local convenience stores, based on varied government and private data sources.
The report by venture capital firm Blume Ventures shows that India's GDP is primarily dependent on consumer spending, with investments being a much smaller contributor.
Data from the Swiss bank UBS says India is the fifth-largest consumption market globally behind the United States and China, but its consumption growth in the past ten years has been faster than these other countries.
But when it comes to per capita consumption expenditure, India seems far behind China and even Indonesia, the report says, indicating the wide inequality in wealth and spending power in India.
Data from various private finance and investment firms shows that India’s spending on products such as air-conditioners, fast-moving consumer goods (FMCG), credit cards, mutual funds etc. compared to other countries is considerably low.
This is because India’s main ‘consuming class’, that forms the primary market for most startups, is only 10% of the population, or around 14 crore people, according to Blume’s research. India has a population of 140 crore people.
This 10% consumer segment, referred to as India1, is responsible for two-thirds or 66% of the discretionary spending (on non-essential expenses) in the country, the report says.
But this segment is only ‘deepening’ but not ‘widening’, the report says, backed with data indicating that while people from the bottom 90% are unable to join the top segment, the wealthiest class is growing even wealthier.
Data from various private sources, like periodic reports from investment banks, suggest that air travel, two-wheeler purchases, online food delivery and other such consumption driven by the top 10% has not increased much in terms of the number of users, in recent years.
However, there has been a rise in consumption of expensive products such as premium motorcycles, cars and smartphones, as well as high-end housing, in the past five years according to the report.
It is this top 10% that heavily influences the consumer market and what startups and other businesses do, as suggested by consumption around concerts, travel, luxury brands, and even the way our cities look.
The India1 segment prefers living in gate communities, the report says, calling them ‘concentrations of affluence’.
Based on data from Mygate, the app used by many gated communities, the report says 40% of households in the top 50 Indian cities are living in gated communities, and that their spending power contributes to more than half of these cities’ consumption expenditure.
Calling the wealthiest 10% of Indians a ‘high income’ country of their own within India, the report says, “India1 will be an advanced economy well before India overall becomes a developed country.”
While India is the most populated country in the world today, even India1 or the top 10% alone would form the tenth most populous country in the world, with 14 crore people.
In terms of per capita income, India1 would rank 63rd in the world, way ahead of India’s 140th rank, as per World Bank data.
The report also looks at India’s venture market, comparing it with China and the US. It looks at stage-wise funding of startups, India’s unicorn startups, and the trend of startups founded by Indians abroad relocating to India.
It also looks at the rapid rise in quick commerce in India, with some data suggesting that in the past three years, the gross order value through these platforms has risen 24-fold.
India’s quick commerce companies are expected to have 2.6 crore monthly transactional users in the financial 2025-26, while Swiggy and Zomato together are expected to have over 4 crore users making transactions each month.
The low cost of labour is one of the main reasons for the rise in quick commerce, the report notes, showing that the minimum wage in India is much lower than in the US, China, and even Mexico and Indonesia.
The proportion of the total order value that is paid to the delivery worker is also much lower in India, compared to similar apps in Germany and China, the report shows.
“As quick commerce's success inspires larger horizontal and vertical e-commerce players to start their experiments, we are likely to see a speeding up of delivery times in India across most types of deliveries. We will be a quickish commerce country,” the report says.
Inevitably, this has had an impact on local convenience stores or kirana stores, with their share of the Gross Value Added of Trade Sector, and in the number of Total Unincorporated Enterprises, going down in the past ten years.
But while there are projections of monthly quick commerce users rising as high as 13 crore in 2031 (from the current 2.6 crore), the report cautions against such expectations, noting that people’s spending power hasn’t been going up with time, which means quick commerce will struggle to expand their consumer base beyond the top 10%.
“As Quick Commerce expands, and the toll on Kiranas becomes more visible, we may see more visible debates and measures to check Quick Commerce's growth,” the report says.