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India witnessed an unprecedented surge in festive spending this Diwali, with sales reaching a record Rs 6.05 lakh crore, Finance Minister Nirmala Sitharaman said on Wednesday. The growth was fueled by GST rate reductions and strong consumer preference for homegrown, or ‘swadeshi’, products.

According to the Confederation of All India Traders (CAIT), goods accounted for Rs 5.4 lakh crore of this total, while services contributed Rs 65,000 crore. This represents a 25 per cent increase over the Rs 4.25 lakh crore recorded during the Navratri to Diwali period in 2024, marking the highest festive sales in India’s trading history, according to the CAIT research wing, the Research and Trade Development Society, as reported by IANS.

Mainline retail was identified as the largest contributor to overall sales by the survey with a share of almost 85 per cent thus, indicating a comeback of physical stores after a long time of their decline due to e-commerce.

The lower GST rates on major consumer categories including chocolates, home furnishings, shoes, clothes, electronic items, and daily essentials made the prices more attractive and thus more shopping was done. Around 72 per cent of the merchants acknowledged the role of reduced GST rates in the form of increased sales volumes.

Also Read: UPI transactions hit Rs 94,000 crore daily in October; festive spending, GST cuts drive record surge

Stable prices amid high festive demand boosted consumer confidence, ensuring continued spending even after Diwali. The non-corporate and non-agricultural sector, comprising around 9 crore small businesses and small manufacturing units, remained a key driver of India’s retail growth.

Temporary employment for nearly 50 lakh people was generated across logistics, transport, retail assistance, packaging, and delivery during the festive season, the survey showed.

Enhanced purchasing power in rural and semi-urban areas accounted for 28 per cent of total sales, reflecting deeper economic penetration beyond metropolitan cities.

Also Read: GST relief turns Navratri into record-breaking festive phase; Diwali demand set to rise

According to the CAIT, the festive trade this year was a “new standard set in the retail and trading economy of India,” a synthesis of custom, modernity, and faith in the Indian business. The record-shattering figures also point to the government’s endeavor for Aatmanirbhar Bharat, or self-sufficient India, under PM Modi’s leadership.

Diwali this year is a clear example of how the combination of policy measures like GST cuts, along with raising consumer confidence and local product support, can engage the whole Indian economy, both the urban and rural areas.