Tier-2 cities drive India’s home interiors market as average spending hits ₹3.9 lakh

India’s home interiors market is increasingly finding growth beyond the major metropolitan centres, with households in Tier-2 cities rapidly increasing their spending on design-led and modular living spaces. According to Deloitte’s September 2026 report, Tier-2 households spent an average of ₹3.9 lakh per home on interiors in 2025, equivalent to nearly 74% of spending levels in Tier-1 cities.

The data points to a broader change in consumption patterns across smaller Indian cities, where rising aspirations, residential development and greater exposure to design trends are encouraging homeowners to spend more on their living spaces. Deloitte said the interiors market in Tier-2 cities is growing almost twice as fast as Tier-1 markets, supported by demand for modular and design-led homes.

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₹3.9 lakh average spending in Tier-2 homes

The growing expenditure on interiors reflects a shift in how Indian households perceive home improvement. Interiors are increasingly being viewed not simply as a one-time expense but as an investment in comfort, aesthetics, functionality and lifestyle.

Deloitte estimates that consumers are allocating around 10-15% of their home value to interiors, while luxury décor shopping recorded a 300% year-on-year increase in 2025 compared with 2024, highlighting the growing importance of aesthetics in home-related spending.

The shift is also visible in purchasing behaviour. Deloitte found that categories such as storage, kitchen utilities, organisers and lighting recorded twice the transaction intensity of furniture in 2025 compared with 2024. Cross-category purchases, including combinations such as wall art and wall accents or modular products, also increased by 62%.

Smaller cities close the consumption gap

The Tier-2 interiors boom is significant because spending in these markets is no longer restricted to basic furniture or functional upgrades. Consumers are increasingly seeking modular kitchens, customised furniture, improved lighting, better storage and design-focused solutions.

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Deloitte's findings indicate that 74% of Tier-1 interiors spending has already been reached by Tier-2 households, suggesting a narrowing consumption gap between India's largest cities and emerging urban centres.

At the broader market level, India's home and household sector is projected to grow 1.6 times over the next five years to reach $260 billion by 2030. Furniture and furnishings alone are expected to rise from $39 billion in 2025 to $67 billion by 2030, while interior services are projected to increase from $4 billion to $8 billion.