India's retail sector has recorded its highest-ever Diwali sales, reaching a staggering ₹5.4 lakh crore. This surge is attributed to a combination of factors, including the growing sentiment of "Swadeshi" (promoting domestic goods), recent Goods and Services Tax (GST) reforms, and robust consumer demand. The Confederation of All India Traders (CAIT) reports that sales from Navratri to Diwali saw a 25% increase compared to the previous year's ₹4.25 lakh crore.
Several factors contributed to this impressive performance. The reduction in GST rates on various consumer goods, such as confectionery, footwear, home decor, ready-made garments, and consumer durables, played a significant role. These revisions made products more affordable, boosting purchasing power, especially among middle-class families. About 72% of traders surveyed indicated that the lower GST rates directly led to higher sales volumes. The simplification of GST to two main slabs, 5% and 18%, along with the potential merging of the 28% slab into 18% for most products, has also been speculated to further ease household budgets during the festive season.
The "Swadeshi" sentiment, amplified by Prime Minister Narendra Modi's call for "Vocal for Local," has further fueled the sales boom. Consumers are increasingly preferring Indian-made products, contributing to a significant decline in demand for Chinese imports. This shift has boosted domestic manufacturing, with many companies witnessing double-digit growth in demand for their "Made in India" portfolios. A decade ago, "Swadeshi" primarily meant Khadi and handicrafts. Today, it encompasses a wide range of products, including family SUVs, locally assembled smartphones, and home appliances.
The surge in sales has also generated temporary employment for an estimated 50 lakh people across various sectors, including logistics, transport, retail assistance, packaging, and delivery. Furthermore, enhanced spending power in rural and semi-urban areas accounted for nearly 28% of total sales, highlighting the increasing economic penetration beyond metropolitan centers.
Mainline retail experienced a strong revival, accounting for approximately 85% of total sales, signaling a resurgence in brick-and-mortar stores. This indicates that despite the growing popularity of online shopping, many consumers still prefer the traditional "touch and feel" retail experience.
The Diwali sales boom reflects a combination of economic reforms, a growing sense of national pride, and strong consumer confidence. CAIT stated that Diwali 2025 has set a new benchmark in India's retail economy, reflecting the fusion of tradition, technology, and trust in Indian enterprise. The surge in sales is expected to significantly boost liquidity flow in the economy, strengthen trade, and inject new enthusiasm into the consumer market. This festive season marks a milestone in building an "Aatmanirbhar Bharat" (self-reliant India), aligning with Prime Minister Narendra Modi's vision.
