PM Modi’s Tax Cut Sparks ₹6 Lakh Crore Festival Shopping Boom Across India

NEW DELHI: India witnessed a record-breaking ₹6 lakh crore shopping spree during the 2025 festive season, powered by Prime Minister Narendra Modi’s sweeping Goods and Services Tax (GST) reduction. The month-long celebration between Navratri and Diwali (Sept. 22–Oct. 21) saw consumption surge 8.5% higher compared to last year, according to retail data shared with Bloomberg by Bizom.

💸 India’s Festival Boom

The total festival-period sales touched ₹6 trillion (≈$67.6 billion), covering diverse categories — jewelry, automobiles, consumer durables, kitchen appliances, clothing, and sweets — according to the Confederation of All India Traders (CAIT).

The shopping wave marked a significant revival in domestic demand after the economy faced headwinds from the 50% import levy imposed by the U.S. earlier this year.

In response, the government slashed GST on nearly 400 product categories, marking India’s first major tax reduction in nearly a decade. The move proved decisive in stimulating consumption and restoring market confidence.

🚗 Auto Sector Drives Growth

India’s leading automakers — Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Hyundai Motor India — reported a sharp rise in festival sales.

• Maruti Suzuki worked extra shifts on Sundays to meet soaring demand for entry-level cars like Alto, WagonR, and S-Presso.
• Tata Motors delivered over 1 lakh cars between Navratri and Dhanteras.
• Hyundai India saw a 20% jump in Dhanteras sales compared to last year.
• Mahindra’s tractor sales surged 27%, supported by a good monsoon and rising rural income.

“We’ve been working Sundays to handle the festival rush — the excitement in showrooms is unbelievable,” said Partho Banerjee, Maruti’s senior marketing officer.

🏠 Consumer Goods and Banking Sector Shine

The consumption wave also lifted other industries. Crompton Greaves, SBI Cards, and Kotak Mahindra Bank reported strong spending in electronics, household, and credit-based purchases.

“We saw buoyancy in the kitchen category,” said Kaleeswaran A., CFO of Crompton Greaves Consumer Electricals Ltd., noting that pressure cookers and lighting products benefited most from tax cuts.

However, some distributors experienced short-term disruption as they cleared inventories at pre-tax-cut prices before new rates took effect.

📊 Analysts Urge Caution

While the sales spike signals optimism, economists warn that part of the growth reflects pent-up demand delayed from August to late September.

Nomura analysts Sonal Varma and Aurodeep Nandi advised that a more accurate assessment would emerge once data from December–January is factored in.
BofA Securities added that slower income growth and a weak labor market could still restrain long-term demand recovery.

🌟 The Road Ahead

Despite headwinds, corporate India remains upbeat. Crompton’s CFO believes the sales momentum will extend through early 2026, supported by housing and infrastructure growth.

“These green shoots give us confidence that consumption is moving in the right direction,” he said.

As the festive glow continues, PM Modi’s tax reform appears to have reignited India’s consumption engine, reaffirming the country’s status as one of the world’s fastest-growing consumer markets.