India’s upcoming Diwali festival is expected to drive record-breaking retail sales this year, with the textiles and garments sector forecast to be one of the main beneficiaries, even as potential US tariffs on textile imports pose challenges for exporters.
According to estimates from the Confederation of All India Traders (CAIT), Diwali trade could surpass Rs. 4.75 lakh crore (US $ 53.50 billion) — the strongest festive season performance in a decade. CAIT Secretary General and Delhi MP Praveen Khandelwal said that recent reductions in GST and Prime Minister Narendra Modi’s Swadeshi and “Vocal for Local” campaigns are expected to provide a significant boost to domestic traders.
He said that this year’s Diwali was likely to “illuminate homes and brighten the fortunes of small traders, manufacturers, artisans, and service providers across India.”
Markets across the country — from traditional bazaars to shopping malls — are projected to witness robust consumer turnout and buoyant spending. Textiles and garments are expected to account for roughly 12% of total festive expenditure, driven by growing consumer preference for locally made products.
Industry analysts note that the sector faces a mixed outlook. While strong domestic demand is expected to lift sales, potential US tariffs on textile imports could weigh on export performance. Manufacturers in key textile hubs such as Surat, Ludhiana, and Tirupur are reportedly ramping up production to cater to domestic festive demand and offset possible international headwinds.
CAIT’s projections indicate that food and groceries will account for 13% of festive trade, textiles and garments 12%, electronics 8%, gift items 8%, and home furnishings 4%. Locally produced Swadeshi textiles are expected to dominate sales, reflecting the momentum of the Atmanirbhar Bharat (self-reliant India) initiative.
Khandelwal underscored the wider economic significance of the festival, stating that Diwali was “not just about lighting lamps but about powering the entire economic ecosystem of Bharat.” He emphasised that “every rupee spent in India strengthens an Indian enterprise,” urging traders to continue promoting Swadeshi goods to ensure authenticity and value in festive shopping.
Industry observers say the Diwali season will highlight the resilience of India’s domestic textile and retail markets. Despite global trade uncertainties, strong consumer sentiment and patriotic purchasing are expected to sustain growth momentum.
As India gears up for Diwali, the textiles and garments sector appears poised to play a leading role in the country’s retail revival — reinforcing the growing importance of domestic demand in supporting the industry amid international pressures.
