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India, known as the land of diversity, is home to a multitude of communities, each with unique cultural traditions. Festival, probably is one thread that binds these diversified culture and traditions into one.

Festivals are an integral part of Indian culture and way of life, providing opportunities for celebration, spiritual growth, community bonding and remembrance of ancestral heritage. These celebrations, which range from major religious festivals like Durga Puja, Diwali and Holi to regional agricultural events such as Pongal and Baisakhi encompass a diverse array of traditions, rituals, music, dance, and communal feasts, reflecting the country's rich cultural diversity and tying together the threads of its history and future. 

Festivals are also sources of social interaction and community bonding. They are viewed as a way to foster geographical connections, a sense of belonging and adaptability. Though festivals may be rooted in specific religious or cultural beliefs, they are open to participation from people of diverse backgrounds and religions. 

Each festival carries its own unique significance, offering valuable lessons, spiritual insights, and cultural traditions that have been passed down through generations. Come October and India is busy celebrating its biggest festivals - Durga puja and Diwali. Traditionally, festivals are a significant part of Indian culture, acting as a vehicle for promoting our values and emotions. While each community and each region have its own festivals, two of its biggest festivals; Durga puja and Diwali cut all boundaries and are celebrated across the country and across religions.

Festivals, however, no longer remain as social, cultural or religious affairs; they have become huge economic multipliers today. Festivals like Diwali and Durga puja are considered by the traders as the focal points of marketing. The farmers can be seen to throng their shops with their newly harvested crops. This is the time when new products are launched and special sale offers are made by corporate and companies, all with an aim to expand market presence.

Uniting the celebrating spirits and religious sentiments of people, festivals have become the biggest marketing time for clothes, electronics, consumer goods, cars and even real estates. In fact, Indian sellers today eagerly await the onset of festive seasons with numerous offers, discounts and freebies.

Festival Economy

India's festival economy is a massive, burgeoning sector, with festivals in 2024 was estimated to have generated about $75 billion in revenue, driving significant growth in sectors like retail, e-commerce, and tourism. A report from the Ministry of Information and Broadcasting highlights the live events industry's transformation into a formalized pillar of the cultural and creative economy, spurred by robust audience demand and digital innovation. Key trends include increased consumption in rural India and Tier II/III cities, a rise in e-commerce and beauty product sales during the festive season, and the rapid growth of music tourism and other cultural events.

Festivals like Diwali are considered by the traders as auspicious moments to offer puja at their shop, open new accounts. All over the world, consumer sentiments and religious beliefs, often underlying festivals, play an important role in the economic activities of buying and selling of goods and services. Durga puja, Diwali, and their preceding weeks are traditionally a period of heightened consumption and investment in India. Demand and sales during this period are often seen as a barometer of the vitality of business and the economy.

Traditionally, sale of dress materials, consumer durables, electronic goods, jewellery and even big-ticket items such as real estate and automobiles picks up during the festival times. The tourism sector also sees growth since holidaying to different destinations is common during

Durga puja and Diwali.

But if sales of organised sectors rise during this period due to their huge marketing network and large advertisement spending, the unorganised sector too benefits by offering newer and exclusive products. Artisans, who mostly reside in rural areas, see significant rise in demand for their exclusive products, especially from the new generation buyers during festival times. Youth of new India are now using and promoting mostly products made in the country, especially during festivals, which directly impacts the unorganised sector. The artisan industry is the second largest employer in developing nations after agriculture and employs women in large numbers. Their earnings go up during the festival season.

The economic impact of festivals is, in fact, too big to ignore. The total economic worth of the creative activities involved in Durga puja festival is about ₹32,377 crore and the festival contributes 2.58% of West Bengal’s GDP, reveals a study carried out by the British Council.

The first of its kind detailed study of different aspects of the Durga puja festival commissioned by the West Bengal Government’s tourism department looks at ten creative industries related to the pujas such as installation, idol making, lighting and illumination, retail, sponsorship, advertisement and food and beverages. The project was done between September 2019 and January 2020, with fieldwork completed in an intense three-week period around the time of the festival, and the report recently released.

The report ‘Mapping the Creative Economy around Durga Puja 2019’ points out that the economic value of the art and decoration segment was ₹860 crore and Kolkata accounted for 15% share of the pandal-making industry in West Bengal. The Durga puja economy has increased manifolds since 2019 and according to West Bengal Chief Minister Mamata Banerjee the state witnessed business of over ₹ 85,000 crore and employment generation for around 3 lakh people during the 2023 festivities.

Referring to a survey by the British Council which stated that West Bengal recorded a business of ₹72,000 crore during this year's Durga Puja, a seemingly happy Mamata Banerjee said she hoped that the business will grow in the coming years.

The other big festival of India, Diwali, is not just a festival, it’s the heart of India’s annual retail cycle and the festive e-commerce market expected to soar past ten billion dollars in 2025. The projected record-breaking growth of 2025 Diwali sales is a perfect blend of economic and technological shift. The widespread adoption of digital payments has fundamentally changed India’s shopping behaviour, shifting towards e-commerce.

Festivals impact on consumer sentiment

The intersection of cultural consumption and macroeconomic performance has garnered increasing scholarly attention in India where festivals play a pivotal role in shaping consumer behavior. Empirical studies have explored the role of seasonal and cultural events in driving consumption-led growth. Indrajeet M Acharjee’s work ‘To what extent does festival-driven consumption influence aggregate demand and key macroeconomic indicators in India’ shows a strong positive impact of festivals on consumer sentiment. Abhijit Banerjee and Duflo E’s study on ‘The economic lives of the poor” observed that household spending in low- and middle-income economies often spikes during festivals, wedding seasons, and harvest periods, creating cyclical boosts in economic activity.

Festivals in India are not only cultural and religious celebrations but also powerful engines of economic activity. They trigger cyclical surges in consumer spending, drive retail expansion, boost digital and traditional commerce, and generate significant employment across sectors. From the bustling streets of urban centres to the vibrant bazaars of rural towns, the festive season catalyses a unique confluence of cultural exuberance and economic vibrancy. These annual events, particularly Diwali and Dussehra, serve as short-term economic stimuli by substantially increasing aggregate demand and stimulating production in multiple sectors including consumer goods, electronics, fashion, gold, hospitality, and logistics.

According to a study by the Confederation of Indian Industry the festive spending in 2024 was estimated at over `1.5 trillion, marking a 22% increase over the previous year. This surge was attributed to factors such as pent-up demand, rising disposable incomes, and a solid post-pandemic economic rebound. Similarly, the Confederation of All India Traders highlighted a record trade of ` 3.75 lakh crore during Diwali alone, with an additional `50,000 crore in cumulative sales expected from festivals such as Govardhan Pooja, Bhaiya Dooj, Chhath Pooja, and Tulsi Vivah. These figures underscore the macroeconomic importance of festivals as indicators of both consumer confidence and broader economic health.

Festival seasons such as Diwali and Durga puja have consistently triggered a sharp rise in consumer expenditure across India. Over the past five years, there has been a steady upward trend in festival-related consumption spending. In 2021, despite the pandemic's economic disruption, festive sales amounted to approximately `58,405 crore. The momentum continued in 2023, with festive spending increasing to `81,000 crore, driven by pent-up demand and higher online and offline participation. By 2024, festival-related consumption peaked at an estimated one lakh crore rupees, marking the highest festive season expenditure recorded in recent history. Festival seasons in India, notably Diwali and Durga puja, significantly boost consumer spending.    

According to most market surveys the growth trend of festive season sales is likely to continue this year too. Datum Intelligence, a global consumer research organization providing market intelligence and data-driven insights on consumer behavior, forecasts India's 2025 festive e-commerce sales to exceed ` 1.2 lakh crore, representing a 27% year-on-year increase from 2024. The report, published in late August 2025, highlights the significance of the festive season for e-commerce, noting it runs from mid-September to late October and includes major events like Diwali and Dussehra. The quick commerce segment is expected to contribute around ` 14,010 crore to this total, with overall sales growth driven by demand from non-metro cities and premium product categories like smartphones and fashion.

Another strategy consultant, Redseer, has projected India's 2025 festive e-commerce market to reach over `1.15 lakh crore (approximately $13.06 billion), growing 20-25% and marking the best period in five years due to structural shifts and early momentum. Key trends include a dual-peak demand curve, a rapid rise in quick commerce and a focus on value during the festive season. Consumers are increasingly engaging with flexible shopping, while brands must plan for two demand spikes, particularly with a likely GST slab simplification around Diwali. 

The festive season is the largest consumption period for India, making up 30-40% of annual sales for categories such as apparel and electronics. This year, the festive period is critical for ecommerce platforms and retailers as sales have stayed weak for the past few quarters.

Maybe, the GST rationalization aligning with India’s economic reset just ahead of the festive season will act as a booster to consumer sentiment. In a broad sense, lower tax rates will make a range of consumer items cheaper, which should boost consumption. From toothpaste to ACs, medicines, and small cars, the government has announced relief on major items that consumers spend a significant portion of their income on. Therefore, it makes sense to expect consumers to spend more as they will have more disposable income now.

Big ticket sales

The rationalisation of the GST rate is expected to have a significant impact on automobile sales following a fall in their prices. The preliminary estimates show that the cut in GST rate from 28% to 18% will reduce prices ranging between `40,000 and ` 155,000 on cars and sports utility vehicles in the mass market segment.

Looking at the booking and enquiry trends since the announcement of the reformed GST rates, there should be no surprise if automobile sales increase by a minimum of 20% in volumes during the current festive season.

Indeed, India’s auto industry is gearing up for record festive sales of over 5.2 million units, driven by GST cuts and strong consumer demand. Auto dealers across segments such as passenger vehicles, two and three-wheelers, commercial vehicles and tractors are confident of a growth of more than 20% during the festive period, over the total of 4.28 million sold during the same period last year. 

Following improved demand, new launches and higher production, the passenger vehicle sales this festive season could touch their highest levels in a decade, the Federation of Automobile Dealers Associations of India said, adding that two-wheeler sales could also finally see an uptick this year.

For the first seven months of 2025 (January–July), total automobile domestic sales in India were stable, with passenger vehicles showing a slight de-growth, while two-wheelers and three-wheelers recorded growth, according to the Society of Indian Automobile Manufacturers (SIAM). The GST rate cut now gives a new hope of a better performance during the later part of the year.

But if the improvement in macro fundamentals as well as rationalisation of GST rates have boosted the prospect of higher automobile sales in 2025, the real estate market too is expected to see a significant rise in the festive season.

India’s residential real estate market has experienced a slight deceleration in the new housing project launches so far in the current year. According to the latest report of the Confederation of Real Estate Developers’ Associations of India (CREDAI) and CRE Matrix, the number of units launched across India has been declining, from approximately 3 lakh units in H1 2024 to about 2.6 lakh units in H1 2025, a decline of around 5%.

The recent GST cuts on cement (28% to 18%) and other construction materials (like marble, granite, bricks, from 12% to 5%) are expected to reduce construction costs by 3-5%, thereby increasing the affordability and viability of housing projects, especially in the mid-income segment. This will likely boost consumer demand and confidence, leading to more new home launches, particularly ahead of the festive season, and improve overall market sentiment in key real estate corridors. 

For Indians, buying a home is as special as celebrating any festival. Buying property during Diwali is perhaps one of the best events every year. Many homebuyers consider this festival more auspicious and favourable.

Jewellers hope gold to sparkle this Diwali

India’s gold consumption is projected to fall sharply in 2025 as record prices impact jewellery sales – gold prices have surged nearly 54% compared to last year, exceeding ` 1,00,000 per 10 grams. The World Gold Council (WCG) estimates consumption between 600 to 700 tonnes, dropping from 802.8 tonnes last year.

However, despite WGC’s report of a decelerating consumption demand, Jewellers across the country are expecting gold to sparkle during this Diwali, as the reduction in prices of consumer durables following GST rates rationalisation will provide comfort to retail consumers and encourage purchases of jewellery.

Gold demand in India usually strengthens towards the end of the year, which coincides with the traditional wedding season and major festivals including Diwali and Dussehra, when bullion buying is considered auspicious.

Gold demand in India is showing signs of a pickup with the onset of the festive season, led primarily by a surge in physical investment demand for bars and coins, according to market reports and anecdotal evidence from trade channels. Investment interest is reportedly outpacing jewellery purchases, as consumers are drawn in by the renewed uptrend in prices and expectations of further increases.

According to the Indian Bullion and Jewellers Association 47 tonnes of gold were sold during India's 2024 festive period (Dhanteras-Diwali. The high price of gold led to a significant shift in consumer demand towards silver, which experienced record sales, according to the IBJA.             

And if rising prices are dampening the gold demand, the consumers are adapting to the price surge by opting for lighter pieces and experimenting with varied caratages that better suit their budgets. And thus, despite a a fall in volume sales the overall value of sales of jewellery is expected to grow, driven by strong emotional and cultural ties to gold during auspicious occasions.