UBS analysts reports India to become 3rd largest global consumer market in 2026

By Anjali Sharma

WASHINGTON- UBS analysts in a recent report released on Tuesday said that India is set to become the world’s third-largest consumer market in 2026 and third-largest economy by 2028 after the US and China, as it could maintain potential real GDP growth of 6.5% year-on-year between FY28-30.

The report stated that the global growth could slow marginally to 3.1% 2026 from 3.2% in 2025, before rising to 3.3% in 2028.

UBS said that retail flow still supports the market, selling pressure from foreign investors and increasingly IPO/capital-raising activity by corporate must be watched.

The analysts wrote “India lacks any direct artificial intelligence (AI) beneficiary stocks, unlike other larger markets. Among sectors, we prefer banks and consumer staples in the Indian context,”.

UBS has assumed that the US-India trade deal will materialize and the additional 25% penalty will be withdrawn, reciprocal tariff on India is lowered to around 15%, which is closer to the levels of other Asian countries, by December 2025-end.

The company said that India’s real GDP growth is likely to stabilize at 6.4% YoY in FY27 (10bps below consensus) and 6.5% in FY28, on supportive policy and strong domestic demand, making it the fastest growing economy in the Asia Pacific region in 2027, followed by Philippines (GDP growth at 6.1%) and Indonesia at 5.1%.

UBS added that “India’s household consumption nearly doubled in the past decade to $2.4 trillion in 2024, recording a 7.9% CAGR, stronger than China, the US and Germany. Our estimates indicate India’s consumer market is on track to become the world’s third largest in 2026, well before its GDP does by 2028.”