India is one of the fastest-growing economies in the world, and its festive season spending is surging as customers splash out on TVs, vehicles, and smartphones according to a report by Bloomberg.
During the first week of the holiday sales, sales at online retailers like Flipkart, owned by Walmart Inc., and Amazon.com Inc. increased by over 5 per cent compared to the same period last year. October saw a 40 per cent increase in digital transactions compared to the same month last year, according to Unified Payments Interface data.
India's festive season runs up to the festival of Diwali, which falls on 12 November this year. During this time, millions of Indians typically overindulge in food, presents, and home renovations. Sales, which account for about 60 per cent of India's Gross Domestic Product (GDP), are a crucial barometer of the state of consumption.
The bulk of people in India reside in rural areas, where economists predict that salaries would rise and inflation will moderate. According to the most recent data from the central bank, consumer confidence hit a four-year high in September 2023. Meanwhile, despite this year's interest rate hikes, demand for bank loans is almost at a 12-year high.
Ahead of the elections, the administration of Prime Minister Narendra Modi is also focusing on farmers, offering them lower cooking gas prices and higher guaranteed prices on particular crops.
The third-largest economy in Asia is seeing stronger expenditure, which is supporting growth of above 6 per cent in the current fiscal year that ends in March. India's economy is expected to develop at the quickest rate among major economies, 6.3 per cent in both 2023 and 2024, according to the International Monetary Fund (IMF).
While banks like Axis Bank Ltd. are counting on an improvement in economic activity in the coming months, consumer businesses are reporting improved sales.
This festive season spending is also complimented by the ICC ODI Cricket World Cup being held in India this year and is currently going on. Economists predict that the event could add $2.6 billion to the Indian economy as fans spend on travel and eating out.