Indian Festive Shopping Frenzy Fuels Economic Boost
NEWDELHI: India is experiencing a surge in festive season spending, with consumers investing in vehicles, smartphones, and TVs, providing a significant boost to one of the world’s fastest-growing economies. Online platforms like Amazon and Flipkart saw sales increase by nearly 20% during the first week of festive sales compared to the previous year. Digital transactions processed by Unified Payments Interface also surged by approximately 40% in October year-on-year.
India’s festive season typically lasts for several weeks leading up to the Hindu holiday of Diwali, and it serves as a crucial indicator of consumption health, contributing to about 60% of the country’s GDP. This rise in spending is attributed to easing inflation, wage growth, and increased consumer confidence, particularly in rural areas.
The government, led by Prime Minister Narendra Modi, has provided support to farmers by offering higher guaranteed crop prices and reducing cooking gas costs, further strengthening rural and urban consumption.
This robust spending is driving manufacturing activity in India and supporting a growth rate of over 6% for the current fiscal year. The International Monetary Fund predicts India’s economy will continue to grow rapidly, at 6.3% in 2023 and 2024, making it the fastest-growing major economy.
Consumer businesses and banks are reporting stronger sales, and additional economic boosts are expected from the ongoing Cricket World Cup and the upcoming wedding season.
Online sales, primarily driven by mobile phones, electronic goods, and large appliances, reached significant figures during the festive period. Digital transactions, credit card payments, and high-frequency indicators like goods and services tax collection and peak electricity demand all paint a picture of strong and robust consumption in India.
With these factors combined, India’s economy is well-poised for near-term growth, as easy credit availability and expectations of cooling inflation support a gradual recovery in discretionary spending.
Businesses, including manufacturers, are experiencing strong demand, with multiple shifts being added to production to meet orders in sectors like mobile phones, LED televisions, and washing machines.
