GST 2.0 Fuels Record-Breaking Festive Sales As Urban India Plans To Spend Rs 2.19 Lakh Crore: Study

Festivities, deep discounts and price drops call for splurges and long To-Buy lists. With most Indian households pausing their big ticket purchases for attractive deals amid auspicious festivals, this season's demand is paired with the recently announced GST rate cuts.

The big event coupled with the tax cut is set to see boosted demand and spends, compared to the previous year. These factors bring a significant surge in consumer confidence as well, fuelling a record-breaking festive season spends in urban India.

A study by LocalCircles that covers 44,000 urban household consumers located in 319 districts of India, shows that 37% of urban households are gearing up to spend Rs 20,000 or more this year.

This year marks a sharp increase from just 26% in 2024. With more disposable income in hand, consumers are poised to make big-ticket purchases and indulge in festive cheer.

The festive spirit is translating into a massive economic boost, with LocalCircles estimating the total urban India festive spending to reach Rs 2.19 lakh crore this year.

This figure represents an 18% increase over the Rs 1.85 lakh crore spent in 2024. The driving force behind this growth is the notable rise in high-spending households, who are confidently allocating larger budgets for their festive shopping.

This trend signals a strong consumer-led recovery and a positive outlook for the retail sector, given the increased spending.

While traditional markets and retail stores remain popular, digital shopping is emerging as the new favourite means for the big shop.

The study shows that the percentage of households planning to use e-commerce platforms as their primary shopping channel has more than doubled, jumping from 13% in 2024 to a significant 28% in 2025.

This 115% surge is driven by the convenience, attractive deals, and wider product selection offered by online platforms. As a result, e-commerce is set to capture a much larger share of the festive season market, according to the report.