Decoding the Success of the Interior Design Industry in India

Interior design encompasses understanding, organising and enhancing the internal architecture of human-made spaces, thus combining the arts and science. It includes activities such as conceptual development, site assessment, research, project management, spatial planning and design execution.

Interior decorators then perform these activities after analysing interior space requirements. The decorators select stylistic elements such as colour schemes, lighting or materials for comfort, and functionally efficient yet visually pleasing environments. As a result, there is now widespread acceptance of interior design in both residential and commercial structures, driven by enhanced space efficiency and functionality.

Evolution of India’s Interior Design Industry

India’s interior design industry has experienced a transformation over the past few decades. Driven by rapid urbanisation, rising disposable incomes and evolving lifestyle preferences, the industry has emerged as a crucial contributor to the country’s economy.

Source: Medium research

The future of the Indian interior design market appears exceptionally promising, with industry experts projecting a market size of US$ 81.2 billion by 2030, translating into a significant CAGR of 14.3%.

Commercial property being a major contributor to industry growth

The interior design market can be classified by application into the residential and commercial segments.

Source: Medium research

The commercial interior design segment is the largest market with a share of around 75% as of 2023; it is also the fastest-growing segment in the country. Growth in this segment is driven by India’s booming commercial real estate market. Also, India is experiencing a transition in its work culture, in which the office interior plays an important role. Professional interior design helps make office spaces more comfortable and aligned with the client’s brand philosophy. Professionals can always advise on better utilisation of office space, which reflects the nature of work and the work environment.

Factors Contributing to the Success of Interior Design Market in India

• Economic growth and increasing disposable income

India’s expanding middle class with its higher-than-before disposable incomes has played an important role in the development of the interior design industry. The spending power of people has increased, leading to an upsurge in demand for services such as interior design. This has resulted in more opportunities for interior designers and companies, thus driving competition and promoting innovation within the industry.

• Booming real estate market

India’s urban population is growing rapidly. Data from the World Bank shows that India’s urban population increased from 31.16% of the overall population in 2011 to 34.03% by 2020 and is estimated to reach 40.0% by 2030. The increase in urban population has fuelled a surge in the need for residential properties while increasing workforce amid a booming economy has compelled companies to invest more in their infrastructure.

According to research by the IMARC Group, India’s real estate market was worth US$ 280 billion in 2023 and is set to rise to US$ 562 billion by 2032. The rise in urban population and growth in real estate market directly links with interior design service requirements as homeowners and businesses always seek attractive and functional workspaces.

Property sales in India in CY2023 reached record highs, hitting 26% YoY growth with 271,818 units sold across the top seven cities in the country.

As real estate prices soar, effective space management becomes essential. Professional interior designers optimise smaller areas, thus enhancing functionality and aesthetics, making the most of limited space in modern living.

• Influence of social media and technological innovations

The demand for interior designers is also driven by the trends of smart homes, social media and changing lifestyles. Homes and businesses prefer theme-based designs with trends such as Mediterranean, European or Ethnic Indian styles. New technologies such as virtual reality have disrupted the interior design industry, enabling both clients and designers to visualise and experiment with ideas, although these technologies are not adopted by mass due to their high costs.

• Changing lifestyle preferences

Modern Indian consumers are increasingly exposed to global trends and lifestyles. Platforms like Instagram and Pinterest have become significant trend influencers, showcasing the latest in interior design and home décor. This exposure has led to a shift in consumer preferences, with a growing emphasis on contemporary and innovative design solutions.

Government Initiatives

There are various measures and policies introduced by the government of India which indirectly supports the growth of interior design industry. The Pradhan Mantri Awas Yojana (PMAY) launched in 2015 targets affordable housing for all by 2022. Moreover, In the Union Budget for 2024-25, a sum of Rs. 30,170 crore (US$ 3.60 billion) has been allocated to Pradhan Mantri Awas Yojana (Urban) 2.0, including Rs. 4,000 crore (US$ 477 million) specifically for Credit Linked Subsidy Scheme (CLSS). This is expected to further augment the growth in construction of residential houses and thereby increasing the demand for interior design services. This smart city mission transforms about one hundred urban areas spread across India; thus, allowing designers to create inventive sustainable environments.

• India Design Council

The India Design Council, an independent entity under the Government of India operating within the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, serves as the country's premier organization for diverse design disciplines. Its primary mission is to advocate for design, aiming to transform India into a nation driven by design. Leading the way in shaping the country's design landscape, the India Design Council collaborates with governmental bodies, the design sector, businesses, educational institutions, and society to advance design in commerce, public services, and community development while fostering design innovation.

• Design (Amendment) Rules, 2021

In order to encourage startups and small businesses to safeguard their designs and encourage more design registrations, fees have been lowered in a manner similar to the adjustments made in the Patent and Trademark regulations.

Challenges Faced

• Competition and economic fluctuations

The sector is highly fragmented, with numerous small and unorganised players. This fragmentation can lead to inconsistent service quality and pricing. Additionally, the industry is susceptible to economic fluctuations, as discretionary spending on home improvement can be affected by economic downturns. Consequently, firms should have different core competencies as well as innovative ways of designing spaces that will help them attract clients effectively.

• Skill gaps and quality standards

It is difficult to maintain high quality in design projects due to a lack of appropriate skills in workers. Consistently delivering outstanding results calls for thorough training and expertise required from designers. To bridge these gaps and uphold standards, there should be continuous professional development as well as adherence to industry quality benchmarks.

• Sustainability and environmental concerns

Today, clients are increasingly looking forward to sustainable and eco-friendly solutions in their designs. The balancing act between aesthetics and environmental responsibility represents a major challenge that concern many designers. These concerns can only be addressed by designers keeping up to date on sustainable practices, materials and technologies employed in the industry currently. However, the inclusion of sustainability into designs following client’s specifications is based on deep knowledge about green building principles as well as reducing the environmental footprint of this sector through its practitioners’ commitment.

Opportunities for Growth

• Changing tendencies and specialisations

The interior design business is experiencing growth through elements such as bio-philic designs, incorporating smart home technology and going sustainable. Specific sectors – such as healthcare, hotels and shared workspaces – create spaces for specialisation and innovation. Keeping up with these trends while targeting unique markets can help an organisation achieve distinction in the market. They can thus exploit emerging consumer tastes for exceptional personalised interior design solutions.

• Opportunity for international linkage

The Indian interior design industry can experience significant growth as there is great potential in collaborating with international firms, designers and suppliers. Collaborations across borders help in transferring knowledge, assimilate cultural diversities as well as open new markets. The industry therefore needs to grab opportunities to increase international presence, which will eventually give the Indian professionals access to diverse architectural viewpoints. They can thus offer their clients world-class approaches in designing interiors while also promoting healthy competition within the sector.

Conclusion

The vitality of the interior design sector in India is a testament for the country’s growing economy and society. The industry has evolved into an integral part of Indian economy due to urbanization, increasing disposable income, change in lifestyle preferences, and technological advancement. Nevertheless, it is important to acknowledge that the future of this industry is on the brink of significant advancement driven by the emergence of new technologies. In order to optimize operations and improve decision-making capabilities, predictive analytics will continue to be critical as far as data analysis is concerned. Moreover, AI and ML will bring about further automation that will lead to more efficiency and cost reductions. IoT shall result in seamless connectivity facilitating real-time monitoring changing supply chains and customer experiences forever. AR/VR technology are expected to revolutionize training and simulation within this industry segment. Sustainability should occur through use of eco-friendly approaches and renewable energy sources being implemented as key priorities as well. Consequently, digital transformation would occur across the entire sector thereby altering its conventional workings while creating new avenues for innovation.