New Delhi, 22 October 2025 — India’s retail markets lit up this festive season, with overall sales during Diwali 2025 crossing a record ₹6 trillion. A survey by the Confederation of All India Traders (CAIT), covering 60 key distribution hubs across state capitals and Tier-2 and Tier-3 cities, reported goods sales worth ₹5.40 trillion and services contributing another ₹65,000 crore. This marks a sharp rise from last year’s total Diwali sales of approximately ₹4.25 trillion, signalling a robust year-on-year growth.

Physical, Neighbourhood Shopping Hubs Reign Supreme

CAIT’s data shows that an overwhelming 85% of total sales came from “mainline retail” — comprising non-corporate, traditional marketplaces. This highlights a striking revival in physical, neighbourhood shopping and a boost for small traders and “mom-and-pop” stores.

The trend is especially promising for local retailers and the bottom-up retail economy, particularly in smaller towns and semi-urban centres.

Sector-Wise Surge: Who Bought What?

In the goods segment, the top-performing sectors and their contributions to total retail sales were as follows:

• Grocery & FMCG: 12%
• Gold & Jewellery: 10%
• Electronics & Electricals: 8%
• Consumer Durables: 7%
• Ready-made Garments: 7%
• Gift Items: 7%
• Home Decor: 5%

On the services side (₹65,000 crore), spending spanned logistics, hospitality, cab services, travel, event management, tent and décor, delivery, and workforce services. Notably, nearly 28% of total trade came from rural and semi-urban pockets, indicating that the festive boom transcended major metros.

GST Reforms Behind the Boom

One of the primary catalysts for this unprecedented surge is the government’s rollout of “GST 2.0”, which simplified the tax structure by reducing the number of slabs. The new regime, effective from 22 September 2025, introduced just two GST rates — 5% and 18% — replacing the earlier, more complex system.

As per industry estimates, households earning approximately ₹50,000 per month now save over ₹1,275 monthly due to lower GST burdens.

A CAIT survey among traders revealed that 72% attributed the rise in festive sales to reduced GST rates on products like footwear, apparel, sweets, home decor, and consumer durables.

What Made This Year Different?

Several other factors gave a push to consumption:

• GST timing: The tax cuts just ahead of Navratri and Diwali likely deferred spending into the festive weeks.
• Vocal for Local momentum: A renewed push for local products helped Indian-made goods post a 25% increase in sales over last year.
• Improved consumer sentiment: Despite inflationary pressures, reduced taxes, attractive festive offers, and positive mood drove discretionary spending.
• Spread beyond metros: Tier-2 and Tier-3 cities and smaller markets played a large role in the sales surge, hinting at broader consumption growth.

Broader Economic Impacts

According to CAIT, the festive season also created around 50 lakh temporary jobs across the supply chain — including logistics, warehousing, packers, delivery staff, and retail assistants.

The surge in demand also strengthened manufacturing and distribution networks, creating a multiplier effect that rippled across the economy beyond the immediate festival period.

Implications & Outlook

The record-breaking Diwali sales reflect several key economic patterns:

• Simplified tax regimes can meaningfully boost consumer demand, especially when strategically introduced.
• Traditional retail continues to be a major force, particularly in small towns and non-metro markets.
• Double-digit growth in both goods and services shows the deep interconnections between festival spending and broader sectors like travel, hospitality, and event services.
• Multiple consumption-heavy sectors, from jewellery to electronics and clothing, participated — showing that the revival wasn’t limited to niche categories.

However, sustaining this momentum post-Diwali will depend on sustained income growth, stable inflation, and continued footfalls. It will also be crucial for the benefits of GST cuts to be fully passed on to consumers, rather than absorbed by intermediaries.

Conclusion

Diwali 2025’s record sales have done much more than mark a festive high — they represent a deeper shift in India’s retail economy. With total sales exceeding ₹6 trillion, supported by tax reforms, rising consumer confidence, and grassroots participation, the festival has illuminated not just homes but the path toward stronger, consumption-led economic growth. If sustained, this momentum could accelerate India’s broader economic recovery and pave the way for more inclusive retail expansion in the months ahead.