Diwali Likely To Boost Textile Sales Amid US Tariff Impact
India’s Diwali festival is expected to drive record retail sales this year, with textiles and garments projected to be a major beneficiary despite potential challenges from US tariffs on textile imports.The Confederation of All India Traders (Cait) estimates that Diwali trade could cross Rs 4.75 lakh crore, marking the strongest festive season in a decade. Cait Secretary General and Delhi MP Praveen Khandelwal said recent GST reductions and Prime Minister Narendra Modi’s Swadeshi and “Vocal for Local” initiatives are expected to give a major boost to domestic traders.
“This Diwali is likely to illuminate homes and brighten the fortunes of small traders, manufacturers, artisans, and service providers across India,” Khandelwal said.
Markets across the country, from traditional bazaars to modern shopping malls, are forecast to see strong footfall and consumer confidence. Textiles and garments, projected to account for 12 per cent of festival spending, are expected to benefit from increased demand for locally made products as consumers prioritise Swadeshi goods over imports.
Analysts say the sector faces mixed prospects. While domestic consumption is expected to surge, potential US tariffs on textile imports could weigh on exports. Many Indian textile manufacturers, particularly in hubs such as Surat, Ludhiana, and Tirupur, are expected to rely on domestic festive demand to offset possible international headwinds.
Cait's estimates indicate that Diwali trade will span multiple sectors, with food and groceries accounting for 13 per cent, textiles and garments 12 per cent, electronics 8 per cent, gift items 8 per cent, and home furnishings 4 per cent. Traders report that locally made Swadeshi textiles are likely to dominate, reflecting the growing success of the Atmanirbhar Bharat initiative.
The festival is also expected to energise India’s service sector, with hotels, restaurants, event management companies, caterers, decorators, cab operators, and artists anticipating a boost from celebrations and gatherings across the country.
Khandelwal emphasised the broader economic impact, saying, “Diwali is not just about lighting lamps — it is about powering the entire economic ecosystem of Bharat. Every rupee spent in India strengthens an Indian enterprise.” He urged traders to continue promoting Swadeshi products to ensure both value and authenticity in festive purchases.
Industry sources suggest that textile manufacturers are likely ramping up production ahead of Diwali to meet domestic demand, while exporters may explore alternative international markets in anticipation of US trade restrictions.
Overall, analysts say the festival season could demonstrate the resilience of India’s domestic textile market, with Swadeshi sentiment and strong consumer spending expected to mitigate global trade uncertainties.
As India prepares for Diwali, textiles and garments are projected to play a leading role in the country’s retail revival, highlighting the importance of domestic demand in sustaining the industry amid international trade pressures.
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