Mumbai: Indian consumers are becoming increasingly cautious with their finances amid mounting global economic and geopolitical uncertainty, according to the latest edition of Kantar’s State of the Nation consumer sentiment study. While consumers remain resilient, the report highlights a growing emphasis on financial security, value-driven spending, and long-term preparedness.
The latest wave of the study, conducted in May 2026, revisited consumers after an earlier survey conducted ahead of the Union Budget in January. The findings indicate a noticeable shift in sentiment as concerns around global economic slowdown, geopolitical tensions, inflation, and employment stability continue to weigh on households.
Confidence in Economy and Personal Finances Declines
Consumer optimism regarding India’s economic outlook has softened considerably over the past few months. According to the report, only 48% of respondents now expect the economy to improve in 2026, compared to 60% in January.
Concerns about job security have also intensified, with fears of layoffs rising from 36% in January to 41% in May. Personal financial outlooks have similarly weakened, with 61% of consumers expecting their savings and investments to either remain unchanged or decline compared to 2025. Only 39% anticipate growth in their financial assets.
Financial Preparedness Takes Centre Stage
The study reveals that long-term financial security is becoming a major priority for Indian households.
Healthcare expenses remain the biggest concern, cited by 85% of respondents, followed by rising living costs (80%), retirement preparedness (78%), and managing rent or EMI commitments (71%).
As a result, nearly two-thirds (63%) of consumers say they are very likely to increase savings for themselves and their families. However, financial pressures persist, with 33% reporting a decline in savings and investments over the past year, while only 28% reported growth.
Consumers Become More Selective in Spending
Rather than eliminating discretionary spending altogether, Indian consumers are becoming increasingly deliberate about where they allocate their money.
The proportion of consumers planning to increase discretionary spending on categories such as dining out, entertainment, shopping, and subscriptions has dipped to 53%, down from 55% in January. Meanwhile, those intending to cut such spending have increased from 8% to 10%.
A similar trend is visible in high-ticket purchases, where consumers planning to increase spending have fallen from 46% to 44%, while those planning to reduce spending have risen sharply from 11% to 16%.
Inflation continues to be the primary driver of spending caution, cited by 65% of respondents. Other factors include the desire to save more (48%), economic uncertainty (45%), and concerns around investment returns (42%).
To manage finances more effectively, consumers are adopting practical measures:
- 44% are reducing electricity and fuel consumption.
- 42% are cooking at home more frequently and cutting back on dining out.
- 41% are reducing subscription expenses.
- 39% are delaying purchases until major sales and actively seeking discounts and promotional offers.
At the same time, consumers continue to favour assets perceived as stable and secure. More than half (52%) say they are very likely to purchase gold over the next 12 months, reinforcing its status as a preferred long-term investment.
Travel and Experiences Continue to Hold Appeal
Despite growing financial caution, consumers remain willing to spend on experiences that offer emotional and personal value.
The report found that:
- 60% plan to take a domestic holiday in the next 12 months.
- 52% intend to travel internationally.
- 52% are likely to spend on once-in-a-lifetime experiences.
These findings suggest that while households are tightening budgets in certain areas, they continue to prioritise travel and meaningful experiences that contribute to wellbeing and quality of life.
Implications for Brands
Kantar notes that the Indian consumer is not withdrawing from spending but is becoming far more intentional in decision-making. Brands that can demonstrate clear value, build trust, and offer meaningful benefits are likely to be better positioned in the current environment.
Commenting on the findings, Deepender Rana, Executive Managing Director, South Asia, Kantar, says, “Our latest report shows that Indian consumers remain resilient but are becoming noticeably more cautious as economic and geopolitical uncertainty rises. Confidence in future financial growth has softened, while concerns around job security, retirement preparedness and rising living costs have intensified. As a result, consumers are becoming more deliberate in how they spend- prioritising savings, value and long-term financial security, while continuing to protect experiences that enhance their wellbeing and quality of life. For brands, this presents a clear imperative: demonstrate tangible value, build trust and relevance and deliver meaningful benefits that help consumers navigate uncertainty with greater confidence.”
The findings underscore a growing shift in consumer behaviour—one where financial prudence, value-conscious choices, and future preparedness are increasingly shaping purchasing decisions across categories.
