Cutting Costs, Not Experiences: The Balancing Act Of Indian Households Amid Global Uncertainty

Indian consumers are becoming more cautious with their finances amid global uncertainty, yet they are not abandoning their spending plans altogether. According to Kantar's latest consumer sentiment survey, households are spending more selectively, prioritising value, and strengthening their focus on long-term financial stability.

The May 2026 edition of Kantar's State of the Nation study revisited consumer attitudes first captured before the Union Budget in January. The research reveals a set of consumers navigating concerns about a potential global economic slowdown, and increasing job-related anxieties, while adjusting financial habits accordingly.

Consumer optimism about the Indian economy has weakened since the beginning of the year. Just 48% of respondents now believe the economy will improve in 2026, compared with 60% in January. Concerns over employment have also intensified, with the proportion of people worried about layoffs rising from 36% to 41%.

Financial confidence at the household level has weakened as well. Around 61% of consumers expect their savings and investments to either stagnate or decrease during the year, while only 39% foresee growth in their financial assets.

Against this backdrop, financial preparedness has become increasingly important. Medical expenses remain the leading concern, mentioned by 85% of respondents, followed by the rising cost of living at 80%. Retirement planning is another major worry, with 78% expressing concerns about having sufficient funds later in life. This concern is particularly pronounced among consumers aged 36–45. In addition, 71% are concerned about meeting rents and EMIs.

As a result, saving has become a higher priority. Nearly two-thirds of respondents indicated they are highly likely to increase savings for themselves and their families. Nevertheless, financial strain remains evident. One-third reported lower savings and investment levels compared with 2025, while 28% said their holdings had increased.

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Spending behaviour is also becoming more deliberate. The proportion of consumers intending to increase discretionary expenditure on activities such as dining out, entertainment, shopping, and subscriptions has slipped slightly from 55% in January to 53% in May. Meanwhile, those planning to reduce such spending have risen from 8% to 10%.

A similar trend is visible in major purchases. Consumers expecting to spend more on big-ticket items declined from 46% to 44%, while those intending to cut back increased significantly from 11% to 16%.

Inflation continues to be the biggest factor influencing spending decisions, cited by 65% of respondents. Other reasons for caution include the desire to build savings, concerns about economic conditions, and uncertainty regarding investment performance.

To manage expenses, households are making practical adjustments. About 44% are trying to lower electricity and fuel costs, 42% are reducing restaurant visits and cooking more meals at home, and 41% are trimming subscription-related expenses. Additionally, 39% are postponing purchases until major sales periods and actively seeking discounts and promotional offers.

Despite this caution, consumers continue to favour investments perceived as stable and dependable. Gold remains particularly attractive, with 52% saying they are very likely to purchase the precious metal within the next year.

Travel and experiential spending stand out as areas of resilience. Even as consumers become more selective about everyday expenditures, they continue to prioritise activities that deliver personal satisfaction and memorable experiences.

The study found that 60% plan to take a domestic holiday in the coming year, while 52% expect to travel internationally. A similar share expressed willingness to spend on unique, once-in-a-lifetime experiences.

These findings indicate that consumers are differentiating between routine expenses and spending that enhances their quality of life. While they are exercising greater discipline in managing daily finances, they remain prepared to invest in travel and experiences that contribute to personal wellbeing.

Commenting on the survey, Kantar South Asia Executive Managing Director Deepender Rana noted that Indian consumers remain resilient despite growing economic and geopolitical uncertainty. However, confidence about future financial growth has weakened, while concerns about employment, retirement readiness, and rising living costs have become more pronounced.

For businesses and brands, the implications are clear. "Demonstrate tangible value, build trust and relevance and deliver meaningful benefits that help consumers navigate uncertainty with greater confidence," he said.

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