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Indian Shopping Malls Set to Draw $3.5 Billion in Foreign Investments: Anarock

Retail

Indian Shopping Malls Attract $3.5B Foreign Funds

Business Honor
20 December, 2025

Limited supply, rising consumption and strong occupancy levels position India as a key global retail investment market.

The Indian organized retail market is soon becoming a preferred destination for foreign investments, with shopping malls likely to attract more than $3.5 billion of foreign investment within the next three years, according to a report published by Anarock Research & Advisory. This is a time when the malls of the US and Europe are being shut down due to excess capacity and reduced footfall.

Although the US has witnessed almost 1,200 net mall-based store closings since 2020, the Indian market portrays a different trend with less supply, growing demand, and high investment attraction. Approximately 88 global retail companies have entered the market ranging from 2021 through the initial nine months of 2025, with others assessing expansion opportunities chiefly in Grade-A shopping malls.

Anarock pointed out that a marked absence of institutional retail space was found in India. The per-capita retail space in Tier I cities is 4 to 6 sq ft, while Grade-A mall space per person is 0.6 sq ft only. This creates a gap resulting in occupancy ratios of 95 to 100% in prime malls. This problem prevails in major city locations. The US records a per-capita retail space of 23 sq ft.

The story of growth in India is based on the emergence of a $6 trillion consumption economy by 2030. The retail sector is dominated by malls as catchall consumer destination centers, where food, beverage, and entertainment categories attract between 30% to 35% of foot traffic. The bigger malls see over 20,000 footfalls during weekdays, which exceed 40,000 during weekends.

Investor sentiment has been further bolstered by the listing of the Nexus Select Trust REIT in 2023, which marked the retail-focused REIT in India, and more are expected to follow at the end of the decade. Despite the challenge posed by the e-commerce industry, IRRs of 14-18% make the retail mall in the Indian retail realty space an attractive growth option in the international retail scenario.