New Delhi – India's upcoming festive season is poised to generate over ₹7 lakh crore in trade, a significant increase from last year, according to Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT). This optimistic outlook comes despite prevailing inflation, with traders anticipating a robust 15-18% growth over the previous year.
Khandelwal, speaking on behalf of CAIT, highlighted that a nationwide survey conducted by the organization's research arm across more than 30 cities revealed considerable confidence among merchants. Last year's festive trade stood at approximately ₹6.05 lakh crore, making this year's projection a substantial leap.
Inflation Unlikely to Dampen Spending
The forecast arrives as India has seen an uptick in wholesale inflation, which climbed to 11.39% in September from 9.92% in August. Retail inflation also increased to 5.54%, raising concerns about potential impacts on household budgets. However, Khandelwal believes these higher prices will not significantly deter festive purchases.
He attributes this resilience in consumer sentiment to several factors: improved purchasing power, increased financial liquidity among consumers, and a strong preference for domestically manufactured products. Khandelwal also cited the International Monetary Fund's projection of around 7% economic growth for India as a contributing factor to the overall optimism.
Key Sectors Driving Growth
CAIT's analysis identifies several sectors expected to be major contributors to the festive trade volume. Groceries are estimated to account for 12% of sales, followed closely by gold, bullion, and jewellery at 10%.
- Electronics and electrical goods: 8%
- Consumer durables: 7%
- Readymade garments: 7%
- Gift items: 7%
Beyond goods, the service sector is also anticipated to benefit significantly from the myriad Navratri, Durga Puja, and Diwali events organized nationwide. Packaging is emerging as another growth segment, projected to contribute 3-4% to the festive business.
Offline Retailers vs. E-commerce
Addressing competition from online platforms, Khandelwal reiterated CAIT's long-standing criticism of foreign-funded e-commerce companies, accusing them of engaging in predatory pricing and deep discounting tactics. He asserted that physical stores maintain a crucial advantage, as consumers value the ability to inspect products before making a purchase. Furthermore, he claimed that shoppers are increasingly prioritizing genuine products and are willing to pay a slight premium for them in traditional retail settings.
Khandelwal also touched upon the impact of protests on commercial areas in cities like Delhi, noting that such disruptions have negatively affected business activity. He urged authorities to balance the democratic right to protest with the need to ensure traders can operate their businesses freely.