A richer, more urban and brand-conscious consumer is rapidly changing the Indian market.

Over the past decade, India’s private consumption has nearly doubled, rising from $1 trillion in 2013 to $2.1 trillion in 2024. This surge in spending is fueling demand across key sectors such as automotive, FMCG, and metals. The shift is happening in the backdrop of a weak global economy, where political upheaval, tariffs and falling profits have forced Indian companies to refocus on the domestic market. 

In response, Indian companies are ramping up investments to strengthen their domestic footprint. Government initiatives like ‘Vocal for Local’ have accelerated this shift, encouraging production within India, and boosting local manufacturing.

Dr. Rumki Majumdar, Economist at Deloitte India, notes, “Domestic consumption will remain the cornerstone of India’s economic growth, with both rural and urban demand playing key roles. Improved agricultural incomes, subsidies, government employment initiatives, and services sector growth will support consumption spending.”

This shift is pushing companies to adjust their capacity and investments toward the domestic market, rather than exports. 

In this edition of the Chart of the Week, we analyze major Indian companies that shifted their focus from international markets to domestic between FY15 and FY25.

A growing middle class, higher disposable income, and PLI schemes have boosted domestic automobile sales for Bajaj Auto, Mahindra & Mahindra, and Tata Motors, helping them expand their market share within India.

Government initiatives like Make in India and PM Gati Shakti have nudged manufacturing companies such as Tata Steel, JSW Steel, and Hindalco Industries into increasing domestic production, by shielding them from anti-dumping duties.

Rising rural consumption and growing purchasing power have also led FMCG companies Dabur, Marico, and Tata Consumer Products to strengthen their domestic supply chains and product offerings. The growth in these sectors has attracted over $709.8 billion in foreign direct investment between April 2014 and March 2024.

Richer, urban Indians are buying more vehicles, boosting domestic auto sales growth

India’s automobile sector, valued at $122.5 billion in FY24, ranks fourth globally, up from $74 billion in FY15. It has grown at a 6.4% CAGR and contributes 7.1% to GDP.

Two-wheelers lead with a 75.3% market share, followed by passenger vehicles at 17.6% of total automobile sales. Rising incomes, urbanization, growing EV demand, and government initiatives are driving automobile sector growth.

Bajaj Auto, the fourth-largest two-wheeler manufacturer by market share, operates in 70 countries. In FY25, international revenue dropped by 13.2 percentage points over the past decade to 33%, while domestic revenue rose by 13 percentage points to 67%. Impacted by import restrictions, weaker margins, and currency fluctuations. Opportunities in the Indian market also made Bajaj turn towards the domestic market. 

To strengthen its position in the domestic market, Bajaj Auto launched electric scooters and motorcycles priced under Rs 1.1 lakh for rural and semi-urban areas. It also entered the premium segment with Triumph Motorcycles and expanded its touchpoints to 4,000 locations. Strong growth in domestic demand drove revenue to a 7.6% CAGR from Rs 22,198 crore in FY15 to Rs 46,306 crore in FY24. This growth boosted Bajaj Auto’s share price by 285.9% over the same period.

Bajaj Auto’s domestic EV business is ramping up fast. Rajiv Bajaj, Managing Director of Bajaj Auto, said, “With the rapid launch of new products in the coming months, we aim to achieve an annual sales rate of half a million electric vehicles by the end of FY26. Our expanded portfolio, including the new Chetak electric scooters and electric three-wheelers, will play a key role here.”

Mahindra & Mahindra generates 72.5% of its revenue from the automotive segment. Over the past decade, the company reduced its reliance on international markets due to legal disputes, operational issues, and weak profitability across its U.S. electric two-wheeler business, South Korean EV business, and in Bangladesh. Instead, M&M increased its focus on the domestic market, raising its revenue share from 68% in FY15 to 89% in FY25.

M&M expanded its domestic product lineup by introducing new SUV models, including the Thar, XUV700, and Scorpio. This expansion drove its Sport Utility Vehicle (SUV) market share to 22.5% in FY25, and profit grew fourfold from Rs 3,137.5 crore in FY15 to Rs 12,929.1 crore in FY25.

Policy support fuels surge in construction and manufacturing sectors

The steel industry dominates India’s metal sector, contributing 53% of total production. Output grew from 90 million tonnes in 2015 to 150 million tonnes (MT) by 2025. Sectors such as construction, automotive, and defense are driving consumption. Initiatives, including PM Gati Shakti and National Steel Policy, are reducing India's reliance on steel imports by enhancing logistics and increasing domestic production.

Tata Steel, JSW Steel, Hindalco Industries, and Jindal Steel & Power are expanding domestic capacities to capitalize on this growth.

Tata Steel, one of India’s largest steel producers, increased its focus on domestic operations, raising its domestic revenue share from 32% in FY15 to 75% in FY25. The company reduced its dependence on international markets, in the UK and the Netherlands, due to high energy costs, competition from cheap imports, and strict regulations at its plants.

JSW Steel also reduced its international exposure from 17% of total revenue in FY15 to 8% in FY25 due to mounting losses at its U.S. and Italy plants caused by high costs and labor issues. These challenges led to a 30% drop in exports in FY19, leading the company to shift its focus towards the domestic market. To support domestic growth and capacity targets, Jayant Acharya, Joint MD & CEO of JSW Steel, said, “For FY26, we are targeting 15 million tonnes of production from our Karnataka mines. Our new mining projects in Goa and Odisha will further boost our growth trajectory.” The company aims to reach 50 million tonnes per annum (MTPA) production capacity by FY31, up from 28 MTPA.

Shifting consumer habits drive growth in India’s FMCG sector

The Indian FMCG market is valued at $245.39 billion in 2024 and is expected to grow at a CAGR of 27.9% by 2030. Rising disposable incomes, urbanization, and the expansion of e-commerce and Government initiatives, along with tax reductions, are driving the growth and supporting local manufacturing. 

Shifting consumer preferences for premium, health-conscious, and sustainable products are driving growth for FMCG companies, including  Tata Consumer, Godrej Consumer Products, Dabur, Hindustan Unilever, and Marico. This focus on quality and wellness is improving sales and market share.

Tata Consumer Products (TCPL), which operates in 40 countries, increased its domestic revenue share from 38% in FY15 to 74% in FY25 by reducing its international presence.  The company restructured its operations in  Russia, China, and Sri Lanka due to intense competition and weak margins.

In India, TCPL expanded its portfolio beyond tea and beverages into food products such as snacks, pulses, spices, and packaged foods. The company acquired and integrated its brands in the food and wellness sectors, growing its retail outlets' reach to 4 million in FY25. These initiatives doubled revenue in the past 10 years, and EBITDA margins increased from 10.4% to 15%.

Building on this momentum, Sunil D'Souza, MD & CEO of Tata Consumer Products, said, “We are targeting double-digit revenue growth across all businesses in FY26, with a focus on improving margins through price adjustments and the normalization of tea prices.”

Dabur, operating in over 120 countries, faced regulatory scrutiny and tighter import screening in the UK, and currency volatility, particularly in Egypt and North Africa, impacted its international business, squeezing profitability and revenue growth. 

Over time, the company shifted its focus from international revenue to the Indian market, capitalizing on the rising demand for natural, herbal, and Ayurvedic products, particularly in oral care and honey. Dabur expanded its reach to 122,000 rural areas and grew its product offerings from 1000 to 2000 Stock Keeping Units (SKUs) between FY15 and FY25.