India's middle class, long seen as the backbone of the country's consumption engine, is entering a new phase. The dream is no longer just about owning a house, a car, or the latest gadget. It is increasingly about travel, live events, and curated experiences that create lasting memories.

Data from the latest CMS Consumption Report shows that travel and insurance together now account for over 60% of discretionary spending in India, with mobility alone making up about ₹37 of every ₹100 spent on non-essential categories. This highlights the growing priority given to experiential outlays over traditional retail or durables.

The Experience Economy Takes Off
India's organised live events sector expanded by 44 percent in 2025, according to the FICCI-EY Media and Entertainment Report 2026, making it the fastest-growing segment of the country's entire media and entertainment industry. The report, which covers concerts, cultural gatherings, sports events and experiential formats, points to a consumer that is not retreating from spending on experiences.

India recorded over 130 large-format concert days in 2025—events drawing audiences of 10,000 or more—up from a fraction of that number just two years earlier. The FICCI-EY data projects the organised live events market to grow from Rs. 145 billion in 2025 to Rs. 196 billion by 2028.

Mid-Range Leisure Surges
Analyses of booking behaviour in India indicate a redistribution of budgets: mid-range leisure stays priced between ₹2,000 and ₹6,000 per night have surged by 22% year-on-year and now account for nearly half of all leisure bookings.

"Post-pandemic, we have seen a decisive shift in how travellers define value and where they are willing to spend. Guests today are far more inclined to pay a premium for experiences that are thoughtfully curated and emotionally engaging, rather than for standalone room upgrades," said Nikhil Sharma, Managing Director & COO, South Asia, Radisson Hotel Group.

The 'Triple Squeeze' on Household Budgets
Yet this shift comes against a backdrop of economic pressure. Fuel price hikes, inflationary pressures and weak income growth are squeezing household budgets and reshaping consumption patterns across sectors. India's middle-class households are facing sticky food inflation, rising insurance premiums, and school fees.

Households' savings rates in India have dropped to near 18% of GDP in 2026—the lowest since 2017. A Chartered Accountant has cautioned that India's middle class will see its wealth shrink, despite rising salaries, if the investment mindset does not shift towards growth rather than savings.

A Consumption Dichotomy
There is a slowdown in urban consumption as middle-class household budgets get stretched, but that doesn't necessarily mean all spends are down. There is a consumption dichotomy at play—the segment is moving to smaller packs in some categories because of price hikes but is availing flexible payment schemes for others.

What This Means
Leisure spending is becoming an increasingly important component of urban consumption, particularly among dual-income households and younger demographics prioritising experiential spending over traditional asset accumulation.

Travel retains its aspirational value. That is not in question. But the consumer's relationship with leisure has expanded, and the travel industry's opportunity now lies in expanding with it.

The Way Forward
Industry experts say the combination of thoughtful inclusions, convenience, and meaningful engagement is shaping discretionary spending. Consumers are prioritising experiences that deliver reassurance and well-being over purely functional or low-cost options.

The new middle-class dream is not about having more—it is about living more. And that shift is here to stay.