GST reforms lift Diwali shopping, easing family budgets

Record Diwali Demand Reshapes the Retail Scene

Diwali shoppers spent like never before. This year, goods sales stood at Rs 5 lakh crore and services added Rs 63,500 crore, a solid 25% jump from last year’s festive rush. The boost is seen as a big win for price competitiveness, driven largely by GST reforms that trimmed prices in key categories like confectionery, home decor, and apparel. In fact, 72% of surveyed traders linked their higher sales directly to the lower tax rates.

Mainline retail still led the parade, accounting for nearly 85% of the total sales. That’s a telling sign that brick‑and‑mortar stores aren’t yesterday’s story—they’re firing on all cylinders again. And the good news isn’t just in big cities. Rural and semi‑urban areas pumped in about 28% of the total sales volume, widening the festive footprint beyond urban wallets.

This surge wasn’t just about more money changing hands. It also meant people were more willing to spend during the peak days, helped by stable prices and the extra purchasing power that came with a stronger rural economy. The trade press is calling this a milestone for India’s retail and trading economy, a moment that aligns with the government’s push for an Atmanirbhar Bharat and the growing muscle of India’s 9 crore small businesses and manufacturing sector.

Markets and Policy Pulse during Muhurat Trading

Stock markets joined the festive mood in a different but related way. The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) announced a special Muhurat Trading session from 1:45 pm to 2:45 pm, timed with Laxmi Puja. It’s not a normal trading day, but a short window to honour the holiday and set a cautious, positive tone for the season.

Trading hours across the board were adjusted—foreign exchange and equity markets were closed on Diwali and Balipratipada, giving investors a short break to reflect. Yet the broader market pulse remained upbeat. As of midday on October 21, 2025, the Nifty 50 had climbed around 700 points over the past four sessions, helped by foreign institutions trimming shorts started in October’s F&O series and by improving corporate earnings, especially from Reliance Industries.

Analysts point to a shift in sentiment among foreign investors as a key driver. They’re eyeing reforms like GST 2.0 and a potential tax‑free budget push of about ₹12 lakh crore, which could lift consumption and corporate earnings. Even with Muhurat trading being more symbolic than transactional, the underlying optimism hints at a broader rally if policy changes stick and big firms keep posting solid numbers.

What It Means for You and the Road Ahead

Look, this isn’t just about one festive quarter. The Diwali surge shows demand can stay resilient when prices are clear and competitive, and when purchasing power strengthens in more corners of the country. For ordinary Indians, it signals more dependable trading seasons, steadier prices, and more work in logistics, retail, and delivery—together, about 50 lakh jobs during the peak period.

The big takeaway is policy durability. If GST reforms and a future GST 2.0 keep prices fair and margins sane for retailers, India’s vast network of small businesses can grow without squeezing consumers.

This momentum isn’t a one‑off. It’s a sign that India’s retail spine is strengthening and policy changes are translating into tangible everyday benefits.