India’s next mall boom is taking shape outside its biggest metros, but the opportunity is not simply about adding more shopping centres. It reflects a wider change in how smaller cities are participating in organised consumption, how far urban catchments extend beyond municipal boundaries and how developers are adapting expensive retail formats to local spending power.
The shift is becoming particularly visible during the festive season, when shopping, dining and entertainment are combined in a single visit. For mall operators, this creates an opportunity to serve consumers who increasingly recognise national and international brands but may have had limited access to organised retail in their own cities. For cities, it points to the emergence of new commercial destinations that are no longer dependent entirely on metropolitan demand.
A 2026 report by Boston Consulting Group and the Retailers Association of India identifies tier 2 to tier 4 cities as contributing more than 30 per cent of India’s retail growth through 2035. The report, as cited by NDTV, places smaller urban markets at the centre of the sector’s long-term expansion. Research by NIQ also points to rising incomes and accelerating consumption across these markets, although the supplied material does not provide the detailed methodology or city-level figures behind those findings.
The significance of the trend lies in the combination of demand and limited supply. Gautam Vaswani, chief acquisitions officer at Nexus Select Malls, said tier 2 cities offer rising spending power, strong aspirations and room to expand organised retail. “Shoppers in these cities know the brands they want. They increasingly expect the same choice, quality and experience available in the metros,” Vaswani told NDTV.
That observation changes the way smaller-city retail demand is understood. Consumers are not necessarily waiting for their preferences to be shaped by new malls. They may already be familiar with brands, products and experiences through digital platforms, travel and media. The physical retail market is therefore responding to an existing aspiration and attempting to convert it into local footfall and spending.
But aspiration alone does not make a mall viable. Nexus Select Trust, according to Vaswani, assesses spending power, retailer demand, location and the sustainability of trading performance before considering acquisitions in smaller cities. These criteria underline the institutional complexity behind a mall opening. A project must attract brands, draw customers from a sufficiently large catchment and sustain trading after the initial novelty and festive peaks fade.
The catchment itself may be larger than the city in which a mall is located. Consumers from neighbouring towns and surrounding districts can expand the potential customer base, particularly where competing organised retail is limited. This means that a mall’s performance depends not only on the population within municipal limits, but also on road connectivity, travel patterns, regional purchasing power and the destination value of the property. The supplied report identifies this wider catchment effect but does not provide specific travel-time or sales data for individual malls.
Jaipur illustrates the scale of the opportunity described by developers. The city has a population of more than five million, while its retail catchment is said to extend to Ajmer, Bikaner and Jodhpur. Ludhiana, with more than 2.5 million residents and strong purchasing power, is presented as another market with significant potential. These examples suggest that the relevant urban unit for modern retail is often a regional network rather than a single city.
Dehradun offers a more specific illustration. Abhishek Bansal, managing director of Pacific Group, said Pacific Mall Dehradun demonstrated consumer demand, while the Mall of Dehradun, which opened in 2024, reinforced the opportunity. The evidence in the report does not establish that the two properties have identical formats or performance levels, but their presence is used by the developer as an indication that the city can support multiple organised retail destinations.
The distinction between demand and viable supply is important. A city may have consumers with strong brand aspirations without having the income distribution, retailer mix, land economics or transport access needed to sustain a large metropolitan-style mall. Developers therefore face a design and pricing problem: how to deliver a high-quality experience without importing the full cost structure of a metro project.
Bansal described the central tension directly: the aspiration is metro-level, but price sensitivity remains real. He argued that developers who bring metro luxury formats into tier 2 cities without adapting to local spending patterns could struggle. The implication is that the next phase of mall development will depend less on visual scale and more on commercial fit. The right combination of brands, food, entertainment and pricing may matter more than simply constructing a larger building.
This also places pressure on the conventional definition of a mall. In the account supplied to NDTV, festive visits combine shopping, dining and entertainment, making the property a multi-purpose destination for families. The model is not limited to retail transactions. It depends on dwell time, repeat visits and the ability to make the mall relevant for different members of a household.
For operators, that creates a conversion challenge. Nexus Select Malls is seeing double-digit year-on-year sales growth, supported by high-single-digit growth in footfalls across its tier 2 malls, Vaswani said. Those figures indicate strong current momentum, but they do not by themselves show whether festive or promotional demand is becoming a stable year-round habit. The report identifies this as the central operational challenge: turning seasonal visits into regular shopping behaviour.
That challenge is also an urban planning question. A large mall can become a new node in a city’s movement system, drawing customers from surrounding districts and concentrating traffic, parking demand and public activity. Yet the supplied material does not detail the road capacity, public transport access, parking arrangements or land-use planning around the cited developments. Those factors will influence whether a mall functions as an accessible regional destination or as a car-dependent enclave that serves only a narrower segment of consumers.
The growth of organised retail in smaller cities can also alter the geography of commercial activity. Traditional markets, high streets and local retail clusters may continue to serve different price points and shopping needs, while malls offer branded retail, controlled environments and integrated leisure. The report does not provide evidence on the effect of new malls on existing traders, so the relationship cannot be characterised as either displacement or complementarity on the available information.
The institutional decisions made by developers reveal why the sector cannot be assessed through consumer enthusiasm alone. Retailers must be willing to occupy the space, customers must arrive consistently, and trading performance must remain sustainable. Location is therefore connected to the depth of the regional catchment, the quality of connectivity and the city’s ability to support repeated visits. A mall’s success is produced by an ecosystem of developers, retailers, households and transport networks rather than by the building in isolation.
The cited BCG-RAI estimate of more than 30 per cent of retail growth from tier 2 to tier 4 cities through 2035 gives the trend a long time horizon. However, the figure should not be read as a guarantee that every smaller city can support a major mall. The comments from Nexus Select Malls and Pacific Group point instead to a selective expansion model, in which spending power, retailer demand, catchment reach and format adaptation determine where capital is deployed.
This is why tier 2 malls represent more than a real estate opportunity. They are a test of whether organised urban consumption can be decentralised without simply reproducing metro costs and assumptions. The industry is being asked to provide comparable choice and experience while recognising differences in income, pricing and local behaviour. That makes consumer understanding a commercial requirement as well as a planning concern.
The evidence supplied confirms strong developer interest, rising reported footfall and sales in some tier 2 malls, and a research-backed expectation of substantial retail growth outside the largest cities. It does not establish a uniform national pattern, nor does it resolve how these developments will affect existing markets, mobility systems or city-centre activity. The next stage of the story will depend on whether festive demand becomes regular consumption and whether developers can match metro-level aspirations with locally sustainable formats.
