Festive Sales Surge - Newspaper Summary

 The sources uniformly report a robust surge in Festival Season Sales (Diwali/Dhanteras) in October 2025, painting a picture of strong Indian domestic consumption that provides a crucial counterbalance to ongoing global and domestic economic uncertainties.

I. Festival Season Sales Surge (Diwali/Dhanteras)

Record Sales and Consumer Sentiment

The Dhanteras-Diwali weekend capped off a "big-bang festival season" for the consumer products industry, particularly in the automobile and durables segments.

• Overall Sales Record: According to estimates from the Confederation of All India Traders (CAIT), Diwali sales peaked at a record ₹6.05 lakh crore. This total comprised ₹5.4 lakh crore in goods and ₹65,000 crore in services.
• Growth: This figure marked a double-digit increase over the previous year's sales of ₹4.25 lakh crore.
• Retail Segments: The surge was observed not only at major corporate retailers but also in traditional markets and among non-corporate retailers. Sales momentum is anticipated to continue into the upcoming wedding season.

Key Drivers of the Sales Momentum

The extraordinary growth in sales was fundamentally attributed to buoyant consumer sentiment coupled with specific governmental and financial reliefs.

• Policy Support: Demand was explicitly supported by GST 2.0 reforms, as well as tax and repo rate reliefs. The recent GST rate reductions, effective from September 22, allowed enterprises to recalibrate pricing, catalyzing heightened consumer demand and amplifying purchasing power.
• Consumer Confidence: The buoyant consumer sentiment was a major driver.
• Economic Impact: The sales spike demonstrated that popular festivals in India, with its high average propensity to consume, significantly boost aggregate consumption demand in the economy, creating a "win-win" situation, provided aggregate supply and prices remain stable.

Performance in Key Sectors

1. Automobile Sector: The automobile industry experienced blockbuster sales.

• Tata Motors: The company achieved a landmark milestone of over one lakh vehicle deliveries during the 30-day period from Navratri to Diwali, representing a 33% growth compared to the same period last year. SUVs were the primary growth driver, with the Nexon registering over 38,000 retails (73% growth) and the Punch clocking 32,000 units (29% growth year-on-year).
• Hyundai Motor India: Demand accelerated from Navratri through Dhanteras. Hyundai clocked over 11,000 dealer billings on Day 1 of Navratri, marking its highest single-day tally in the last five years. During Dhanteras alone, Hyundai delivered 14,000 cars, a 20% increase from the previous year.

2. Consumer Durables: This sector also had a "sparkling festival season," with sales exceeding expectations.

• Premiumization: The growth was heavily fuelled by premiumization.
• Product Focus: Haier Appliances India reported a growth of more than 50% during the festival period, led by premium products such as large-screen TVs, side-by-side refrigerators, and front-load washing machines.
• Retailer Feedback: Vijay Sales reported that overall sales rose over 20%, beating expectations.

3. Specific Commodities (Fireworks): While consumer demand was strong, manufacturing faced challenges.

• Demand/Sales: The Sivakasi fireworks industry noted that demand for crackers had not dropped, and whatever was produced was sold in the retail market, confirming a good Diwali season. Production ranged between ₹6,000 crore and ₹7,000 crore, a figure stagnant over the last four to five years.
• Supply Constraints: Production could not be increased due to perennial issues like the inadequate availability of labor (forcing units to look for workers in northern States), frequent safety inspections, and a reduction in the number of Stock Keeping Units (SKUs) due to the green push on crackers.

4. Beverages: An exception to the general surge was the volume decline reported by Coca-Cola in India in Q3 CY2025. This decline was attributed to "inclement weather" (monsoon). Despite this, the company emphasized India's huge long-term potential for volume growth.

II. Festival Sales in the Larger Economic Context (Oct 2025)

The festival sales surge confirms the resilience of Indian domestic demand in the face of broader external and internal headwinds.

Domestic Economic Strength and Constraints

• Manufacturing and Core Sector: High-frequency indicators, including robust retail passenger vehicle sales and retail automobile sales, suggest resilient domestic economic activity and robust manufacturing activity. However, overall Core Sector growth slowed to a three-month low of 3% in September (before the Diwali weekend), dragged down by contractions in coal, crude oil, natural gas, and refinery products. Steel output remained strong, preventing a further weakening of core industries.
• Capex Caution: In contrast to robust consumption, private capital expenditure remains hesitant, primarily constrained by soft domestic demand and geopolitical uncertainty. Sectors like IT, FMCG, and consumer durables were part of the majority of firms committing less than 5% of revenue to expansion (FY23–FY25 median). The major exceptions turning on the investment taps were real estate and power, consistently committing around 10–11% of their revenue.
• Inflation/Monetary Policy: Analysts suggested that the GST rate cuts contributing to the festive surge could turn the inflation forecast more benign, potentially opening space for the RBI to ease monetary policy if GDP growth faced threats.

Market Performance and Investment Flows

• Equity Market: Despite the positive consumption signal, the benchmark indices (Sensex and Nifty) ended only marginally higher during the special one-hour Muhurat trading session on Tuesday, October 22, 2025. The preceding Samvat 2081 was marked by significant under-performance compared to global peers due to a sharp slowdown in India Inc’s earnings growth.
• Outward Investment: Conversely, outward remittances for education abroad fell nearly 24% year-on-year in August (an eight-year low for August) and travel-related remittances dipped 19%. This signals a localized constraint on, or shift in, discretionary outward spending, possibly due to stricter global immigration checks.

Global Context and Geopolitical Influence

While domestic sales soared, the overall economic context remains influenced by global geopolitical tensions.

• US-China Tensions: The surge occurred amid escalating US-China trade tensions, with the US threatening an additional 100% tariff on Chinese goods, and China leveraging its control over rare-earth minerals. Easing of these tensions was cited as a reason for the recent slide in gold and silver prices, as haven demand cooled.
• Trade Deals: India is negotiating a bilateral trade agreement with the US that could slash tariffs on Indian exports. This deal involves India allowing more imports of non-GM American corn and possibly reducing Russian crude imports, which is being monitored by refiners like Reliance Industries Ltd (RIL), which is seen increasing West Asian crude purchases.
• Policy Imperative: The Finance Minister stressed that for India to achieve its aspirational 8% GDP growth, it must accelerate beyond episodic prosperity provided by consumption spikes, focusing on consistent export competitiveness, technological innovation, and addressing structural issues like job creation.