India’s retail sector witnessed a moderation in growth in February 2026, with sales rising 9% year-on-year (YoY), according to the latest survey by the Retailers Association of India.
The report signals a stabilisation in consumption trends following a strong surge driven by the festive and wedding season in previous months.
Apparel Emerges as Top-Performing Retail Segment
Among all retail categories, apparel and clothing led the growth charts, registering a 12% YoY increase in February 2026.
This highlights:
- Continued demand for fashion and lifestyle products
- Strong consumer interest in seasonal wardrobe refresh
- Resilience of the apparel retail segment in India
The performance reinforces apparel’s position as a key growth driver in India’s retail industry, especially during post-festive normalization phases.
Consumption Trends Remain Resilient
Despite seasonal tapering after peak festive demand, the report suggests that overall consumption in India remains stable and resilient.
Key takeaways include:
- Sustained consumer spending momentum
- Balanced demand across essential and discretionary categories
- Gradual shift toward normalized retail growth patterns
This indicates that India’s retail sector is transitioning from high-growth spikes to steady, sustainable expansion.
Regional Performance: West & East Lead Growth
The RAI survey highlighted broad-based regional growth across India:
- Western India: 10% growth
- Eastern India: 10% growth
- Northern India: 9% growth
- Southern India: 8% growth
The data reflects uniform consumption trends across regions, with no significant slowdown concentrated in any specific geography.
Urban and Non-Metro Markets Drive Demand
A key insight from the report is the continued traction in both:
- Urban markets
- Tier II & Tier III cities
This demonstrates:
- Growing purchasing power beyond metros
- Expansion of organized retail in smaller cities
- Rising influence of omnichannel retail strategies
India’s consumption story is increasingly being driven by a broader and more inclusive customer base.
RAI CEO Highlights Stable Growth Outlook
According to Kumar Rajagopalan, the February retail performance reflects a return to stable consumption levels after strong festive demand.
He noted that:
- Growth remains broad-based across categories and regions
- Apparel continues to show consistent strength
- Underlying demand conditions remain healthy
Rising Input Costs May Impact Margins
While demand remains steady, retailers are beginning to face margin pressures due to rising input costs.
Key concerns include:
- Increasing fuel and logistics costs
- Global energy market volatility
- Supply chain uncertainties linked to geopolitical tensions
Recent developments in the Middle East and global oil markets could further influence:
- Retail pricing strategies
- Profitability margins
- Inventory and sourcing decisions
Outlook: Stable Demand, Cautious Profitability
Industry experts believe that:
- Demand fundamentals in India remain strong
- However, cost pressures may impact short-term margins
Retailers may need to:
- Optimize supply chain efficiencies
- Reassess pricing strategies
- Focus on cost control and operational efficiency
Conclusion: Retail Growth Enters a Stable Phase
India’s retail sector is moving into a phase of measured and sustainable growth, supported by:
- Strong apparel demand
- Balanced regional performance
- Expanding consumption base
While macroeconomic and cost pressures remain key watchpoints, the sector continues to demonstrate resilience and long-term growth potential.
Frequently Asked Questions (FAQs)
What is India’s retail growth in February 2026?
India’s retail sector grew 9% year-on-year in February 2026, according to the RAI report.
Which segment performed best in retail?
The apparel and clothing segment led growth with a 12% increase.
Which regions performed best in retail growth?
Western and Eastern India led with 10% growth each.
What challenges are retailers facing?
Retailers are facing rising input costs, especially due to fuel prices and global supply chain uncertainties.