Opportunities Galore For Travel Retail In India

The India travel retail market size is estimated at $2.03 billion in 2024, and is expected to reach $5.40 billion by 2029, growing at a CAGR of 21.59 per cent during the forecast period

The global duty-free and travel retail market size was valued at $76.26 billion in 2024 and is projected to reach from $94.57 billion in 2025 to $528.59 billion by 2033, growing at a CAGR of 24 per cent during the forecast period (2025-2033).

Meanwhile, nearer home, the India travel retail market size is estimated at $2.03 billion in 2024, and is expected to reach $5.40 billion by 2029, growing at a CAGR of 21.59 per cent during the forecast period (2024-2029).This sector’s growth is propelled by an ever increasing number of domestic and international travellers.

Travel retail involves the sale of goods and services to travellers, commonly found in locations like airports, cruise ships and border crossings. These outlets provide cosmetics, perfumes, alcohol, tobacco, and luxury items.

Notably, travel retail offers duty-free shopping, allowing customers to buy items without paying certain local taxes or duties.

Several factors drive the growth of the Indian travel retail market. The increasing incomes in India enable more people to travel, resulting in higher spending in travel retail. Moreover, improved air connectivity, both domestic and international, has made traveling more convenient, thereby boosting the travel retail sector.

India's growing reputation as a tourist hotspot has attracted more international visitors, further contributing to the growth of the travel retail market. Furthermore, changing consumer preferences, focusing on unique and high-quality products, have led to increased purchases from travel retail outlets offering a wide range of goods.

India is experiencing robust consumption and a growing trend towards premiumization, driven by increased disposable incomes among the middle class, easing of Covid-19 restrictions, and enhanced quality, variety, and availability in retail. Momentum is positive across all drinks categories, with a notable surge in demand for brown spirits. Consumers are upgrading their preferences, especially in wine, whisky, and agave-based spirits.

In addition to the diverse product range available at duty-free stores, promotional offers, and other incentives attract the consumers. Interestingly, duty-free shops at airport arrivals in India are outperforming their departure counterparts, with liquor being the top-selling category in arrivals. This may be attributed to the highly competitive prices offered on liquor at duty-free shops. Arrivals contribute significantly to duty-free shop sales, as inbound travelers often make purchases back to the city.

The Indian travel retail market is fragmented with many players. The increasing focus on offering a diverse and wide range of products may enable the vendors to attract many consumers and gain significant market shares.

Adopting innovative promotional campaigns and attractive price offerings may help the players sustain the competition in the travel retail market in India. The key players include Dufry, Lotte, The Shilla, Delhi Duty-Free, and Flemigo Travel Retail.

The duty-free and travel retail market is a tool for economic and social development, including infrastructure and employment creation. Businesses mainly use this channel for marketing their product overseas and expanding globally. The need for luxury and premium goods, promoted by numerous retail chains that offer a variety of goods, is the prominent parameter driving the rise of the worldwide duty-free and travel retail business. Sales in the market may increase due to the growing emphasis on digitizing the retailing process for companies to optimize their earnings.

The growing attractiveness of the tourism and travel industry is another factor in the duty-free and travel retail market, which is increasing the trend. The market studied provides a temporary space that offers extra time to the end users after security check-in and allows the consumers to indulge in buying the products, along with the ambience and experience of shopping for international products. The increase in the footfall of travellers at various international destinations is a primary cause driving the industry. Factors like the rising middle-class population and affordable air travel are expected to drive the industry.

The rise in middle-class median income will also affect middle-class consumers' spending patterns, modes of transportation, and demands for luxury goods, which will boost the growth of the travel retail sector. Rapid urbanization and development will speed up infrastructure construction and provide access to greater amenities on the global market. The construction of new ports and airports will increase revenue.

Travel retail is essentially shoppers' business while travel passengers are in transit. The India travel retail market forecast is segmented by product type distribution channel.

By product type, the market is segmented into fashion and accessories, wine and spirits, tobacco, food and confectionery, fragrances and cosmetics, and other product types. By distribution channel, the market is segmented into airports, cruise liners, railway stations, and other distribution channels.