Diwali And Christmas Are India’s Most Rewarding Annual Economic Events

In recent years, spending during the Christmas season has steadily increased. From 2020 to 2024, global Christmas spending grew annually by approximately five to seven per cent. The United States, Europe, and China have emerged as the primary markets for Christmas-related spending, with U.S. consumers earmarking over 20 per cent of their annual retail spending for this season. Meanwhile, the global Christmas spending is expected to reach $1.25 trillion, representing an eight per cent year-over-year growth.

Likewise, Diwali isn't just a festival of lights as it has become a significant economic event. Let's break down the numbers to understand its true impact on India's economy. Women dominate Christmas shopping and account for the majority of purchases. They tend to plan ahead, beginning their shopping a couple of before Christmas, whereas men prefer to shop in the final week. According to Confederation of All India Traders (CAIT), the 2023 Diwali season generated RS 3.75 lakh crore in economic activity. This number is put at RS 4.25 lakh crore this festive season! In Delhi alone, the 2024 festive business is expected to exceed RS 75,000 crore.

This surge in economic activity is driven by several factors: Diwali sees a spike in purchases across categories from electronics to jewellery. Many companies distribute Diwali bonuses, injecting liquidity into the market. The auspicious period often correlates with increased property transactions and the muhurat trading session, while symbolic, can set the tone for market sentiment. The first week of festive sales, e-commerce marketplaces sold goods worth $6.5 billion, or almost RS 55,000 crore.

That's a 26 per cent increase from last year. But this is not all. Estimates suggest that the total festive period of 2024 would be close to RS 100,000 crore. Some estimates even take this number further to RS 120,000 crore. Moreover, the growth was not restricted to the major cities; rather, high demand was found in Tier II cities and beyond. For example, Meesho claimed that approximately 45 per cent of their buyers came from cities in Tier 2 and above. Consumers also bought products with higher average selling prices, with many opting for EMI payments.

Quick commerce is fuelling retail sales, with quick-commerce platforms expanding their 24x7 delivery services during the festive season to meet consumer demand, especially for late-night orders. Picture a typical Indian household a week before Diwali. Chances are that there's a box of sweets on the dining table, another in the fridge, and probably a few more waiting to be distributed. Now multiply this by millions of households.

That's the scale we are talking about. As India's economy continues to grow, we're also seeing a fascinating evolution on how Indians celebrate—from embracing digital gold investments to using quick commerce for last-minute festive shopping. Perhaps the most telling indicator of Diwali's economic influence is how it creates a ripple effect across sectors—from 30 per cent of annual car sales happening in this period to real estate launches worth RS one lakh crore in Delhi-NCR alone to sweet shops making a third of their yearly revenue.

Diwali will continue to be not just India's biggest festival but also one of its most important economic events.