**New Delhi, October 21, 2025** — India’s festive season, culminating in Diwali, has once again proven to be a powerhouse for the economy, with consumers opening their wallets like never before. This year's Diwali quarter has delivered a blockbuster performance across key sectors, from everyday essentials to big-ticket purchases, signaling robust consumer confidence and a strong economic rebound. The latest figures reveal record-breaking retail sales, a significant surge in auto registrations, and a vibrant textile market, painting a picture of optimism for India Inc. The Confederation of All India Traders (CAIT) reports that Diwali trade this year reached an unprecedented ₹5.40 lakh crore in goods and an additional ₹65,000 crore in services. This ma^[1][2][3]rks a stunning 25% increase over the ₹4.25 lakh crore turnover recorded during the 2024 festive season. Such an i^[1][2][4][3]mpressive jump underscores a powerful revival in consumer spending and retail activity across the nation. ### The ^[2][3]Full Story The festive period, stretching from Navratri in late September to Diwali in mid-October 2025, became a crucial litmus test for India's economic health. Policymakers had set the stage with strategic cuts in Goods and Services Tax (GST) rates and income tax relief, aiming to boost purchasing power. This proa^[5][6][7][8]ctive approach seems to have paid off handsomely, creating a positive sentiment that encouraged middle-class families to spend more freely across a wider range of products. In the F^[5][2][6]ast-Moving Consumer Goods (FMCG) sector, the festive cheer translated into tangible gains. FMCG products, particularly packaged foods, sweets, and decorations, recorded a healthy 8-12% growth during the 2024 festive season. For Diwal^[9][10]i 2025, grocery and FMCG categories led overall festive sales, contributing 12% of the total retail turnover. Companies^[4][3] like Parle Products reported a significant 15-20% surge in primary-level sales, indicating strong demand from distributors and stockists. Adani Wil^[7][10]mar also saw a 5% year-on-year volume increase in Q2 FY26, highlighting sustained momentum. The recen^[7]t GST overhaul in September 2025, which simplified tax slabs and reduced rates on daily-use items, is expected to further boost FMCG growth by 2-3% this season. However,^[7][10] the picture for FMCG wasn't uniformly bright in the preceding quarter. Several major players, including Hindustan Unilever Limited (HUL), Godrej Consumer Products Limited (GCPL), and Marico Limited, reported shrinking margins in Q2 FY25. This was ^[11]largely due to elevated input costs and persistent food inflation, which dampened urban consumption. While urb^[11]an demand faced headwinds, rural demand showed a positive shift, supported by a good monsoon and healthy crop yields in 2024. CRISIL fo^[12][11]recasts a 7-9% revenue growth for the FMCG sector in the current fiscal year (FY25), driven by increased volume and a recovering rural market. The auto^[11][13]motive sector truly hit the accelerator during Diwali 2024. Passenger vehicle registrations reached a record-breaking 425,000 units by October 29, 2024, with potential to hit 450,000 by month-end, surpassing the previous peak in January 2024. This surg^[14][15]e was largely thanks to the unique alignment of major festivals like Navratri, Dussehra, Dhanteras, and Diwali all falling within October 2024, creating a concentrated period of high demand. Overall a^[14][15]uto retail sales in October 2024 jumped by an impressive 32% year-on-year and 64% month-on-month. Passenger^[16][17] vehicles specifically grew by 32% year-on-year, while two-wheeler sales saw an even stronger 36% growth. Leading ^[16][17]carmakers reaped the benefits. Maruti Suzuki reported a 14% year-on-year increase in festive sales volumes from the Shradh period to Diwali 2024, expecting over 200,000 retail vehicle sales in October alone. Tata Moto^[18][15]rs also experienced a substantial 30% year-on-year increase in October 2024 registrations. Interesti^[14][15]ngly, Maruti's rural market performance outpaced urban areas, growing by 31%, attributed to a favorable monsoon and robust crop yields. However, ^[12]it wasn't all smooth sailing; some companies, including Maruti and Tata, saw a decline in *wholesale* dispatches in October 2024 as they focused on reducing high dealer inventory levels. It's also^[12][19][20] worth noting that while overall passenger vehicle sales surged, sales of traditional passenger *cars* (excluding utility vehicles/SUVs) actually registered a 17% de-growth in October 2024, with 107,520 units sold compared to 130,046 in October 2023. This high^[21]lights a clear consumer shift towards larger utility vehicles, which saw a 13.9% growth. The text^[21]ile and garments sector also played a significant role in the festive spending spree. For Diwali 2025, textiles and garments are projected to account for approximately 12% of total festive expenditure. This sect^[22][23]or benefits immensely from strong domestic demand, although it faces potential headwinds from possible US tariffs on textile imports, which could impact export performance. In antici^[22][23]pation, manufacturers in major textile hubs like Surat, Ludhiana, and Tirupur are actively ramping up production to meet the booming domestic festive demand. The gover^[22][23]nment's "Vocal for Local" and "Swadeshi" campaigns have resonated deeply with consumers, with nearly 87% preferring Indian-made products over imports. Online re^[1][4][3]tail saw apparel sales grow by a remarkable 77% during the Diwali 2024 peak week. ### What^[24] This Means This year's Diwali quarter paints a clear picture: Indian consumers are feeling more confident and are willing to spend, especially on discretionary items and upgrades. The blend of government policy support, like GST rationalization, and a recovering rural economy has injected vitality into the market. This translates directly to job creation, with the festive surge in 2025 estimated to have generated temporary employment for nearly 50 lakh people across logistics, transport, retail assistance, packaging, and delivery services. However,^[1][2] the nuanced performance within sectors, like the shift from traditional cars to SUVs and the urban-rural demand divergence in FMCG, shows that businesses need to adapt to evolving consumer preferences. High inventory levels in the auto sector, despite strong sales, suggest that manufacturers must carefully balance supply with demand to avoid future discounting pressures. **Key Points:** * India's overall Diwali retail trade in 2025 is projected to hit a record ₹5.40 lakh crore, a 25% increase from 2024. * FMCG sa^[1][2][3]les led festive spending in 2025, contributing 12% of total retail, with some companies seeing 15-20% primary sales growth. * Auto sa^{[4][3][7][10]}les in October 2024 saw passenger vehicle registrations reach a record 425,000 units, a 32% year-on-year increase. * Textile^{[14][16][15][17]}s and garments are expected to account for 12% of festive expenditure in 2025, driven by domestic demand and "Vocal for Local" campaigns. * GST rat^[22][23]e reductions and income tax relief have significantly boosted consumer sentiment and purchasing power. * Rural d^[5][2][6][7]emand has been a key growth driver, particularly for FMCG and two-wheelers. ### The Bi^[12][11]gger Picture The festive season serves as a critical barometer for India's broader economic health. The robust performance during this period aligns with India's impressive GDP growth of 8.2% for FY24. Looking ahe^[25][26]ad, Deloitte projects a growth rate of 7.0-7.2% for FY 2024-2025, fueled by a resurgent rural economy and strong manufacturing output. This strong^[25] domestic consumption, especially from the non-corporate and non-agricultural sectors comprising 9 crore small businesses, forms a central pillar of India's growth story. The shift ^[2]towards digital payments, with credit card spending touching ₹2.02 trillion in October 2024 (up 13% YoY) and UPI transactions hitting a record 16.6 billion (up 37% YoY), shows how technology is underpinning India's consumption engine, reaching beyond metros to smaller towns. E-commerce sa^[9]les also soared during the 2024 festive period, estimated at $11.9-12 billion (nearly ₹1 trillion), a 23% increase over the previous year. This digital ad^[9]option is not just a convenience; it's a testament to changing consumer habits and broader market access. ### What Happens Next? As the immediate festive high subsides, the focus will shift to sustaining this momentum. The upcoming wedding season in November and December 2024, with an estimated 4.8 million weddings nationwide, is expected to further fuel demand for two-wheelers and passenger vehicles. This post-Diwal^[16][17]i demand, coupled with positive rural sentiments driven by good crop yields, could help maintain sales figures. However, challenges remain. High dealer inventories in the passenger vehicle segment (75-80 days in October 2024) will require careful management by manufacturers to avoid excessive discounting. For FMCG, while^[16] rural demand is recovering, urban consumption needs a stronger boost, particularly if food inflation persists. Experts anticipate the FMCG sector to recover from the slowdown seen in FY25, with lower inflation and cooling input costs improving consumption sentiment. The government'^[7]s continued focus on policy interventions and infrastructure development will be crucial to address uneven spending patterns and ensure sustained, inclusive growth across all regions. Overall, India's latest Diwali quarter has been a resounding success, demonstrating the resilience and dynamism of its diverse consumer market. Businesses and policymakers alike will be watching closely to see if this festive sparkle can translate into a sustained glow for the economy in the months to come.