The Festive Sale Effect

In India, festivals do not just brighten homes, they brighten the economy. It’s that time of year when everyone browses online for clothes, gadgets, and essentials. Events like Flipkart’s Big Billion Days and Amazon’s Great Indian Festival have become major attractions, encouraging customers to shop online. In 2025, online marketplaces are projected to generate nearly ₹1.2 lakh crore in sales, a 27% increase over last year. Unlike previous years, 2025 introduced new GST reforms starting 22nd September, the first day of Navratri. Reduced GST on electronics and simplified compliance for small sellers have lowered prices by 6-8% in key categories while enabling more vendors to come online. This combination of GST cuts, online shopping, and festive sales has made this season a game-changer for the Indian economy.

GST’s Role in Festive Buying

Festive sales in India are driven by one simple emotion: the fear of missing out. The moment discounts go live, people rush online to grab their favourite deals before they disappear. Electronics continue to be the most popular buys, followed by home appliances and fashion. The scale of this demand is massive, Amazon’s Great Indian Festival saw over 38 crore visits in just the first 48 hours. What’s interesting is that nearly 60% of these sales came from Tier-I and Tier-II cities, showing how non-metro areas are also embracing online shopping. For small sellers, too, this season has opened new doors, helping them compete directly with larger brands. On the very first day of Navratri after the GST reforms, digital transactions jumped to ₹11.31 lakh crore, almost 10 times higher than the previous day’s ₹1.18 lakh crore.

Both Flipkart and Amazon confirmed that the recent GST rate cuts are directly benefiting shoppers. Flipkart shared that in just the early days of its festive sale, customers had already enjoyed over ₹200 crore worth of GST savings. Amazon also highlighted that during its Great Indian Festival, sellers were able to pass on more than ₹100 crore in GST benefits, spread across everyday essentials, fashion, appliances, and other popular categories.

The Goods and Services Tax (GST) reforms of September 22, 2025, played a big role in boosting this year’s festive sales. Rates on items like TVs, electronics, and furniture were reduced from 28% to 18%, making them 6–8% cheaper. For buyers, this meant extra savings, while for companies it meant faster stock clearance and higher sales. In fact, the reforms alone led to a 23–25% increase in festive demand across metros and smaller cities alike. The mix of festive discounts and GST cuts created a win-win situation: shoppers could stretch their budgets further, and businesses gained momentum. Many brands across categories—from dairy, two-wheelers, and ice cream to smartphones—announced price cuts or revised MRPs to reflect the reduced GST, aiming to capture consumer sentiment.

Economic Impact & Wider Implications

The festive season in India is not just about lights and sweets, it’s also about the economy getting a much-needed push. The impact of this festive season has been unlike previous ones. India’s online festive season sales are projected to reach ₹1.2 lakh crore in 2025, approximately 27% higher than last year. Consumers are eager not to miss this opportunity. As per the JioStar Festive Sentiment Survey, 92% of Indians plan to maintain or increase their festive spending in 2025, with an average budget of around ₹16,500.

Take Tata Motors, for instance. In September 2025, Tata Motors recorded 60,907 passenger vehicle sales, a jump of 47% compared to the previous year. Much of this was attributed to lower tax burdens and festive buying. For many middle-class families, the GST cut meant a difference of nearly ₹40,000-₹60,000 on certain models. During Navratri, direct-to-consumer sales in beauty and fashion shot up by 25% year-on-year, with personal care alone accounting for nearly 28% of orders. A GST cut of even 5-10% in these categories translates to small savings per product, but across millions of orders, it massively fuels consumption.

In simple terms, the GST cut was like adding fuel to the festive fire. It gave shoppers the confidence to buy more by making goods just a little lighter on the pocket, and it gave companies the push to go all out with their campaigns, knowing higher sales would balance out thinner margins. The effect went far beyond just discounts. When people spend more during India’s biggest shopping season, it sets off a chain reaction that benefits everyone, from the local kirana store and delivery personnel to big automakers and beauty brands.

Challenges

Every year, festive sales face their share of criticism, and this year was no different. Many shoppers felt the GST cuts didn’t fully reach them. A LocalCircles survey showed that 3 in 4 consumers doubt whether brands actually passed on the savings, and nearly 3,000 complaints were filed with the National Consumer Helpline over misleading discounts.

For sellers, the reforms also brought challenges. Overnight changes in GST meant updating billing systems, relabeling stock, and handling tricky returns. Even big names like Hindustan Unilever admitted to “short-term disruptions” as distributors rushed to clear older inventory.

In cities, people shopped online for gadgets and clothes, but not everyone could spend freely. Rising food prices meant many families had to save on other things. So, while the festive sales were big, there were still bumps along the way, showing that tax cuts and shopping excitement don’t always reach everyone equally.

Conclusion

The GST 2.0 reforms have clearly reshaped the festive season, making premium and mid-range products more affordable and boosting consumer confidence across India. With e-commerce sales soaring and more participation from smaller cities, this year’s festive surge highlights the combined impact of policy changes and strong consumer enthusiasm.

Of course, there were challenges. Not all consumers felt the full benefit of GST cuts, and sellers faced last-minute adjustments and inventory hurdles. But despite these bumps, the festive season showed how reforms, technology, and consumer excitement can come together to create real impact.

In the end, people are genuinely excited about this sale and the GST benefits. Small sellers are getting opportunities to expand, and shoppers are enjoying a wide range of deals, making this festive season a memorable one for India, its people, and its economy.

Author: Radhika Agrawal

Illustration: Arnav Jayant