Indian consumers demonstrate cautious optimism in the festive season, inflation concerns reduce: Deloitte India
Price-related anxieties are easing, with inflation concerns dropping by 5 percentage points year-on-year (Y-o-Y) and only 70 percent of consumers now citing inflation as a worry (down from 72 percent).
ADVERTISEMENT
Deloitte India has unveiled the latest edition of its Consumer Signals: India Chapter, revealing a surge in consumer optimism and resilience. This report comes at a time when Indian households are adapting to a new era of balanced, value-driven consumption.
With inflationary pressures easing and the recent Goods and Services Tax (GST) revisions enhancing purchasing power and festive cheer among consumers; this brings a new wave of consumption. This wave is backed by greater financial stability and renewed appetite for discretionary spending. The findings highlight how Indian consumers are moving from caution to confidence showing signals of a mature spending pattern, reassessing priorities, aligning expense with purpose and redefining value in a digitally-enabled economy.
The findings point to a decisive change in consumer behaviour, driven by improving economic conditions and deeper digital engagement. Indian consumers are learning to optimise rather than restrain, redirecting their spending towards categories that enhance quality of life, such as travel, dining, clothing, personal care and household goods. The rise in financial well-being alongside a decline in food frugality signals a move from defensive spending to thoughtful consumption, underscoring the emergence of a mature, self-assured consumer base that is confident, digitally informed and value conscious.
Anand Ramanathan, Partner and Consumer Industry Leader, Deloitte South Asia, said, “The Indian consumer today stands at the intersection of optimism and intent, more discerning, digitally empowered and financially confident than ever before. What we are witnessing is not just a rebound in sentiment, but a recalibration of priorities. Consumers are learning to stretch value, not compromise on aspiration. This balance between aspiration and responsibility is shaping a more mature, self-assured consumption economy; one that is resilient, sustainable and uniquely Indian in its outlook.”
Key Findings
India’s Financial Wellbeing Index (FWBI) continues to outperform both Asia Pacific and global benchmarks (110.3 vs 103.6 globally), underscoring stronger consumer confidence and perceived financial stability. After a brief dip in the previous month, India’s FWBI registered a modest uptick in September 2025, signalling improving comfort across key indicators of financial health.
Price-related anxieties are easing, with inflation concerns dropping by 5 percentage points year-on-year (Y-o-Y) and only 70 percent of consumers now citing inflation as a worry (down from 72 percent). This softening aligns with declining retail inflation since November 2024 and recent GST reforms, both of which are expected to further ease price pressures and spur growth.
The Spending Intentions Intent reflects consumer’s dual inclination to save for the future while re-engaging with lifestyle spending is shaping a balanced consumption curve. The estimated monthly spending amount ( percent change, EMA) has gone up from 2 percent in July to 4 percent in September 2025. Discretionary spending remains below pre-pandemic peaks; however, it continues to rise Y-o-Y, especially during festive and seasonal cycles. Leisure continues to anchor discretionary outlays, with travel, entertainment and wellness maintaining strong momentum, signalling a steady revival in consumer confidence and a cautious but sustained recovery in non-essential spending.
India’s Food Frugality Index (FFI) has dipped to its second-lowest level in three years, proving reduced restraint and a renewed appetite for discretionary food spending. One-third of shoppers are saving by reducing home-food waste, reflecting a shift from sacrifice to smarter consumption. Rather than cutting back, consumers are optimising or managing portion sizes, minimising waste and seeking better value instead of eliminating items altogether. Value-oriented Stock Keeping Units (SKUs), private labels and budget-friendly packs are gaining traction among price-sensitive yet quality-conscious buyers. Notably, India continues to outperform its APAC peers, maintaining lower frugality levels and stronger consumer confidence across essential categories.
Despite ongoing financial caution, Travel and Hospitality have emerged as a consistent and planned household expense, continuing to absorb a steady share of disposable income. Consumers are allocating more towards richer, high-quality experiences by prioritising comfort, convenience and add-ons such as dining and local attractions. Leisure travel remains strong, fueled by rising domestic trips, premium stays and festive demand, with rail trips and hotel bookings showing a slight Y-o-Y spike. Notably, travellers plan to spend 2 percent more on experiences, underscoring the shift towards value-rich, memorable journeys.
India’s Vehicle Purchase Intent (VPI) Index rose 6.6 points Y-o-Y, signalling that consumers are no longer deferring big-ticket buys and continue to invest deeply in experience-led premium purchase Vehicle affordability perceptions have strengthened, with only 23 percent of Indian consumers citing new vehicles as unaffordable, versus 62 percent globally. Recent tax reforms have further boosted affordability, fuelling near-term purchase plans. Demand is shifting to feature-rich, tech-forward models prioritising safety, connectivity and comfort. The intent of purchasing electronic vehicles (EV) continues to surge, with 60 percent planning to buy an EV (up from 47 percent two years ago), driven by cost efficiency, sustainability awareness and supportive policy measures.
As India’s consumers evolve from cautious spenders to confident decision-makers, their choices are shaping a new era of purposeful consumption, one that blends aspiration with responsibility and sets a benchmark for global markets.
