Why is Diwali so important to India’s economy?

Think about this: you are walking down a street in a market. All you see are big banners with “SALE” written and on both sides a huge pool of people rushing towards those banners. That’s pretty much the scene before Diwali in India. You see, Diwali is a big deal for us. It not only has a huge impact on the social and cultural environment of the country but it impacts the economy as well.
This was clicked last year. 🙂

1. Traveling

On the days before Diwali, most Indians scramble for a ticket to go home to their family. During this time, you might have noticed that the price of an airliner or a railway ticket goes very high. It doesn’t matter if you are travelling domestic or international routes, you will be paying more than the usual during this time. This is because most of these companies have to pay bonuses to their workers. These bonuses only come from the excess profit generated by the company during this time.

Diwali sort of becomes a scapegoat for these companies to increase the price of the tickets and they have been successful in doing so. But, most smart travelers book their tickets in advance to avoid the price surge.

2. Shopping

Diwali’s preceding weeks are traditionally a period of consumption and investment in India. Demand and sales during this period are often seen as a barometer of the vitality of business, and the Indian economy. Most of the businesses in India report higher margins of profit during this time of the year. And why wouldn’t it do so?

You see, people want more by paying less. This would mean that companies would need to focus on the quantity of sales. One of the best ways to do it is by dropping the price of the items to a reasonable rate under “SALE.” This has also led to a common behavioral pattern seen among the Indians to save money throughout the year, and spend it on Diwali sales. This has essentially become an indicator for any company (with operations in India) for a success in gaining market share here.

This video will give a clear view about Diwali in today’s time.

Soon after Diwali, the season of weddings, a growing market which is currently valued at $54 billion kicks off. However, much of the wedding related shopping is done during the Diwali season. This is mostly because of the reduced price and partly due to FOMO (Fear of Missing Out). Most of the shopping are driven by impulse. But, even if they are not planning to buy, they cannot resist the temptation of making a purchase because of the irresistible limited-period offers and mega discounts that are offered by brands during Diwali.

3. Fireworks

Although the burning of firecrackers is banned for this year, it still has a huge share in the Indian market. India’s firecracker industry is estimated to be around Rs 50 billion. Before COVID-19, most of the Indian families always had some of its budget to spend on fireworks. This is one market which will see a major decline in its production in future. As the world pledges to fight against climate change, India’s ban on firecrackers could be described as a step towards this policy.

In conclusion, Diwali is the time for businesses to enjoy higher profits. It’s the time for families to reunite and spend time with their loved ones. But, during this pandemic, one thing that will be certain is that there will be less of burning firecrackers. This will definitely help the people who have recovered from the virus to not suffer again. India’s ban on fireworks could prove to be a decisive measure in the 4th Quarter of 2020.

On this auspicious day, I wish all my readers a Happy Diwali. I hope this year brings everyone closer to one another and removes the darkness in one’s mind and soul. I thank you all so much for reading this post. I also apologize for not being regular with my posting schedule. If you enjoyed reading this post, a like would be awesome. If you are new here, do subscribe to the page. Comment below your thoughts on Diwali. You can now follow me on Twitter and Pinterest as well. Check out my previous post here. Stay tuned for more posts by The Antique Economist.


  1. Very interesting post! Is there any other time of the year where the consumer consumption spikes in India?

    All the best, Michelle (michellesclutterbox.com)

    Liked by 1 person

  2. Thanks for sharing! For a backpacker like me, I’m always on the lookout for authentic tips on how to save while at the same time enjoying cultural immersion. I’ve never been to India, but it’s always been a dream destination so cheers! And Happy Diwali!

    Liked by 1 person

  3. I used to look forward to the sweet treats we’d get in the office from those who celebrated Diwali. Things are definetly different this year but hope the spirit of it all was not lost.

    Liked by 1 person

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