Careers Contact us
Menu

The India Briefing

Diwali 2025 – a celebration of lights and economic momentum

This month, we take a look at India’s most celebrated festival, Diwali. It has evolved into a powerful economic driver. It is effectively peak shopping time for hundreds of millions of Indians and an important barometer on the health of the overall economy.

Please find below our latest thoughts on India:

  • India’s most celebrated festival season, Diwali, has been in full swing this month, symbolising the victory of good over evil, knowledge over ignorance, and light over darkness.
  • Diwali greetings bring intentions of new opportunities, growth, and peace for friends and families.
  • Diwali has also evolved into a powerful economic driver in India and a high-profile consumer event mirroring “Black Friday” in the US or “Singles’ Day” in China.
  • It is effectively peak shopping time for hundreds of millions of Indians and an important barometer on the health of the overall economy.
  • This year, in particular, trends are being closely watched as the opposing forces of US trade tariffs, weakness in India’s important IT services sector, a more subdued stock market, and sideways residential property prices in many major cities are met with significant policy stimulus measures to boost domestic consumption for India’s growing middle class.
  • In 2025, it looks like the festival shopping has not disappointed. Diwali has “ignited” record-breaking consumer spending across both urban and rural pockets of India.
  • Surveys of local consumers going into the holiday season suggested that urban Indian spending in 2025 would register around 18% above 2024’s trend.1 That estimate may actually be on the low side; credit card spending one month before Diwali was already up 16% YoY from the same period last year.2
  • Festive spending this year has not only benefitted from the typical seasonal discounts, but also timely rationalisation of the Goods & Services Tax (GST) in September that rendered many goods more affordable, as well as income tax cuts that become effective in April (see India Equity Update - Sep2025 | Allianz Global Investors).
  • Digital transactions have increasingly become the backbone of 2025’s festive commerce. The e-commerce sector recorded a 24% YoY growth in order volumes and a 23% rise in spending value during this year’s Diwali season.3
  • Breaking this down even further, quick commerce platforms saw a 120% surge over last year, driven by demand for deliveries of festive essentials in as little as 10 minutes.2
  • More bespoke gifting trends have also emerged, with personalised hampers, eco-friendly bamboo products, herbal teas, and artisanal chocolates replacing more traditional mithai boxes.
  • Another area seeing a demand acceleration this season is the automotive sector. The last few weeks have witnessed unprecedented demand for passenger vehicles as Indian consumers look to upgrade from two- wheelers to entry-level cars.
  • Indian auto workers have been clocking overtime, working nights and Sundays this October, just to keep up with surging demand.
Figure 1: Healthy consumption patterns this festive season
Another area seeing a demand acceleration this season is the automotive sector.

Source: UBS, as of 23 October 2025.

  • Purchasing a car or any major asset during this auspicious time is believed to invite good fortune and blessings from Goddess Lakshmi, the deity of wealth.
  • As such, aspirational products like electronics, smartphones, and wearables are also hot categories. Electronics are large beneficiaries of the newly introduced GST reforms, now taxed at 18% (down from 28%), making them significantly more affordable.
  • Finally, despite record high gold bullion prices, jewellery and gold have remained popular Diwali purchases in 2025, sparking fears that jewellers could run out of gold bars and coins in an effort to fulfil domestic demand against the global momentum trade in gold.
  • As far as gifts go, equity markets in India have received a couple of nice presents this October in the form of more positive earnings for the September quarter, especially among large bank index heavyweights, and renewed optimism about India-US trade talks.
  • MSCI India is up nearly 6% in October, which is a welcome turn to green to ring in the festive cheer.4

1 India Today, “How Indians are likely to go all out on shopping this festive season,” as of 10 September 2025. 
2 UBS, “India by the numbers: October 2025,” as of 14 October 2025. 
3Fortune India, “Quick commerce lights up Diwali as e-commerce orders jump 24%," as of 17 October 2025.
4 IDS GmbH, Allianz Global Investors, as of 23 October 2025. 

  • Disclaimer
    Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted. This material has not been reviewed by any regulatory authorities. In mainland China, it is for Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations and is for information purpose only. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication's sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of this document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced, except for the case of explicit permission by Allianz Global Investors. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional /professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws. This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; Allianz Global Investors UK Limited, authorized and regulated by the Financial Conduct Authority; in HK, by Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; in Singapore, by Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; in Japan, by Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424], Member of Japan Investment Advisers Association, the Investment Trust Association, Japan and Type II Financial Instruments Firms Association; in Taiwan, by Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan; and in Indonesia, by PT. Allianz Global Investors Asset Management Indonesia licensed by Indonesia Financial Services Authority (OJK). AdMaster: 3414351

Allianz Global Investors

You are leaving this website and being re-directed to the below website. This does not imply any approval or endorsement of the information by Allianz Global Investors Asia Pacific Limited contained in the redirected website nor does Allianz Global Investors Asia Pacific Limited accept any responsibility or liability in connection with this hyperlink and the information contained herein. Please keep in mind that the redirected website may contain funds and strategies not authorized for offering to the public in your jurisdiction. Besides, please also take note on the redirected website’s terms and conditions, privacy and security policies, or other legal information. By clicking “Continue”, you confirm you acknowledge the details mentioned above and would like to continue accessing the redirected website. Please click “Stay here” if you have any concerns.