Festivals, weddings, and GST 2.0: Will the season spark spending?

"Festivals and weddings, a reason to splurge, But GST 2.0 makes our wallets emerge!"

The vibrant hues of Ganesh Chaturthi begin to fade, and the anticipation of Navratri and Diwali fills the air. This year, however, there’s an added layer of excitement—GST 2.0, effective from September 22, 2025. Prime Minister Narendra Modi, in his address to the nation, heralded this reform as a “GST Bachat Utsav,” a savings festival aimed at benefiting the common man, emphasizing that nearly 99% of products previously taxed at 12% have now been moved to the 5% category. Now the people will spend more on the festivals that are around the corner.

A simplified tax structure

GST 2.0 introduces a streamlined system with two primary slabs: 5% and 18%, replacing the previous five-tier structure. The reform is expected to reduce prices on everyday items such as food, medicines, and household goods, potentially boosting consumer spending at a time when festive cheer and wedding celebrations drive the economy. This timing could not be more strategic, as October to December 2025 accounts for 25–35% of annual sales in several categories.

Wedding season: A multi-billion dollar industry

India’s wedding industry, worth an estimated ₹1.5 lakh crore, is a major economic driver. The wedding season, which coincides with the festive period, is poised to feel the effects of GST 2.0 in multiple ways:

Clothing and Apparel: Budget fashion items under ₹2,500 now attract a reduced 5% GST, benefiting brands like Raymond and making festive shopping more affordable. Premium items above ₹2,500, however, have seen an increase in GST from 12% to 18%, which could influence consumer decisions for high-end purchases.

Consumer Goods: Companies such as Amul are expecting double-digit growth in sales during the festive period, thanks to GST reductions and rising consumer confidence. Household purchases for festivals, sweets, gifts, and decorations could see a significant uplift.

Gold: A glittering dilemma

Gold, central to Indian weddings and festivals, presents a more complex scenario. Prices have surged by 42% year-to-date in 2025, reaching ₹109,840 per 10 grams. While GST 2.0 aims to make gold slightly more affordable, soaring base prices may offset potential gains. Analysts anticipate a 10–15% dip in volume as consumers navigate fixed budgets during Dussehra and Diwali. A proposed 1% GST rate cut on gold could ease some pressure, but much depends on global bullion trends.

Market dynamics and consumer behaviour

The festive quarter is traditionally India’s largest consumption period, with consumer enthusiasm peaking for clothing, jewelry, sweets, electronics, and gifts. GST 2.0’s simplification could stimulate the market if businesses implement changes swiftly and pass on the benefits. However, the effectiveness of the reform will also depend on how quickly consumers respond to the perceived savings and whether rising prices in certain categories, like premium apparel and gold, dampen enthusiasm. 

GST2.0 has influenced India's festive e-commerce landscape, notably impacting platforms.. The simplification of the Goods and Services Tax structure to two primary slabs—5% and 18%—has led to reduced prices on a wide array of products, including electronics, apparel, and home essentials. For instance, items such as televisions and air conditioners have seen GST reductions from 28% to 18%, translating to substantial price cuts for consumers. Their timing has been calculated to take advantage of these tax advantages. The e-commerce platforms have made sure that clients receive instant discounts throughout the transaction by updating their pricing systems to reflect the new GST rates. Some have aligned their promotional strategies to highlight the reduced prices, attracting shoppers looking for festive deals on fashion and lifestyle products.

Initiatives by the government 

Uttar Pradesh Chief Minister Yogi Adityanath started the "GST Reform Awareness Campaign" from September 22 to 29, 2025, to guarantee seamless implementation and awareness. In line with Prime Minister Modi's overarching economic goals, the campaign highlights the sale of indigenous (Swadeshi) goods while informing traders, retailers, and consumers about the new tax advantages.

Conclusion

As India enters a season of weddings and celebrations, GST 2.0 comes at a crucial time. The success of the reform will depend on how well it is implemented, how well-informed consumers are, and how responsive the market is, even though it promises cheaper prices for necessities, simpler taxes, and increased consumer spending. It has also given consumers and e-commerce platforms two benefits: cheaper costs and better purchasing experiences. Millions of Indians may experience real savings from GST if they are investing in gold, planning weddings, or shopping for festivals. However, whether this reform can maintain market trust, increase demand, and balance affordability will be the true test. Not only will the country be enjoying Navratri and Diwali this holiday season, but it will also be watching to see if GST 2.0 actually boosts spending and the economy.