Sustaining festive season demand trend to depend on broader economic condition: ICRA
The Goods and Services Tax (GST) has been subject to several rate adjustments since its introduction in 2017, culminating in a major restructuring in September 2025. ‘GST 2.0’, which was introduced from 22 September, has led to significant rate cuts on a wide range of goods and services.
ICRA said this revision aims to make consumer prices more affordable, reduce operational costs of businesses and stimulate demand in sectors such as essentials, housing materials, automobiles and services and improve affordability in key sectors.
“Festive season trends and early indicators confirm these benefits and point to a recovery in demand, particularly for consumer durables. However, sustaining this will depend on broader economic conditions and sector-specific dynamics in the coming quarters,” ICRA said. he said.
Expansion in manufacturing production, supported by demand triggered by stockpiling ahead of GST rationalization during the festive season, accelerated in September 2025, with production of consumer durables showing a significant sequential and year-on-year increase.
The combination of GST rate decline, pent-up demand and early start of festive season seems to have boosted demand in September-October 2025, which is expected to bode well for manufacturing production growth in October 2025 as well. While GST rationalization may support demand for regular use/small-ticket items after the festive season, the buoyancy in demand for big-ticket items will continue to be seen, ICRA said.ICRA said the combination of GST rate rationalisation, pent-up demand and early start of festive season seems to have boosted demand in September-October 2025; This is also expected to bode well for growth in manufacturing production in October 2025.
While GST rationalization may support demand for regular use/small-ticket items after the festive season, demand for big-ticket items will continue to be buoyant, according to ICRA.
Credit card transaction data for October 2025 will only be available through the end of November 2025. Additionally, GST data collected in November for October transactions will be available on December 1, 2025. These data points will provide greater clarity on the viability of consumption trends in October 2025.
