Smaller Sweet Boxes, Bigger Bills: How Inflation Is Changing Diwali Shopping

Diwali is traditionally the time when households loosen their purse strings, stock up on sweets, exchange gifts and bring home festive delicacies. But this year, celebrations are increasingly being shaped by a familiar concern: the rising cost of living. From boxes of kaju katli and laddoos to dry-fruit hampers, groceries and household essentials, higher prices are making festive shopping more expensive even as consumers become cautious about spending.

Traditional Indian sweets have become around 15 per cent more expensive this festive season compared with last year, according to a November 2 report by Moneycontrol. Higher costs of milk, khoya, sugar, nuts and packaging have contributed to the increase. Anjali Jain, who runs Jaipur-based Tyohaar Sweets, told the publication that her business had raised prices by 10-12 per cent because of rising costs across the supply chain.

Dry fruits, a staple of premium Diwali gifting, have become particularly expensive. Pistachio prices have nearly doubled over the past year, while almonds have become around 20 per cent costlier, according to The Economic Times.

For consumers, this means that a festive shopping basket that cost a certain amount last year now requires a larger budget, even when the quantity of purchases remains unchanged. Some households are responding by buying smaller sweet boxes, opting for cheaper alternatives and cutting down on gifts. The changing Diwali shopping basket is therefore not simply a story about expensive mithai. It reflects a wider squeeze on household budgets, with rising food prices leaving consumers with less room for festive spending.

When The Sweetest Part Of Diwali Gets More Expensive

The rising price of mithai is among the most visible manifestations of festive inflation. Traditional Indian sweets depend heavily on dairy products, sugar, ghee and dry fruits, making their prices vulnerable to increases in raw material costs.

Milk is central to preparations such as barfi, peda and kalakand, while ghee and butter are essential to several varieties of laddoos. Cashews, almonds and pistachios are extensively used in premium products such as kaju katli and assorted dry-fruit boxes.

The cost of these ingredients has risen at different points in the supply chain. According to Moneycontrol, sweet manufacturers have faced higher procurement costs for milk, khoya, sugar and nuts, alongside increased packaging expenses. The report also noted that sugar prices in Uttar Pradesh mandis had risen to Rs 5,700 per quintal from Rs 4,800 the previous month.

The dry-fruit market has faced an additional squeeze. Ravindra Mehta, a member of the central governing council of the Nuts and Dry Fruits Council of India, told The Economic Times that the California pistachio crop was expected to be around 40 per cent of the previous year's output. The resulting supply constraints, alongside disruptions in imports, have pushed up prices. The overall basket of nuts and dry fruits has become 25-40 per cent more expensive year-on-year, according to industry estimates cited by the publication.

These increases are changing the economics of festive gifting. Retailers are reducing the quantity of expensive nuts in gift boxes and replacing pistachios with relatively cheaper alternatives such as seeds and berries. Some corporate buyers are also opting for smaller hampers to remain within fixed gifting budgets.

Beyond Mithai: How Inflation Is Eating Into Household Budgets

The increase in mithai prices is part of a broader rise in food and household expenses. For families, the pressure does not begin and end with festive shopping. Money that would otherwise have gone towards gifts, sweets and celebrations is increasingly being spent on necessities.

According to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on October 12, India's retail inflation rose to 5.54 per cent in September 2026, from 4.83 per cent in August. Food inflation accelerated to 7.74 per cent from 5.97 per cent during the same period. Rural food inflation stood at 8.06 per cent, compared with 7.18 per cent in urban areas.

The increase was particularly pronounced in certain food categories. Onion prices rose 108.09 per cent year-on-year in September, while ginger and garlic prices increased by 62.85 per cent and 54.62 per cent, respectively, according to MoSPI's Consumer Price Index data.

The pressure is cumulative. A household paying more for vegetables, dairy products and other essentials has less flexibility to increase spending on festive purchases. Even when incomes remain unchanged, rising essential expenses reduce the amount available for discretionary consumption.

The distinction is important because festive inflation is not merely about consumers paying more for the same sweets or gifts. It is also about what households have to give up or postpone to afford them.

Smaller Purchases, Tighter Budgets: The Festive Spending Slowdown

The changing consumption pattern is reflected in a Mood of the Consumer survey conducted by LocalCircles ahead of the festive season. Based on more than 67,000 responses from urban household consumers across 307 districts, the survey estimated that urban household festive spending would reach approximately Rs 1.97 lakh crore in 2026, down from Rs 2.10 lakh crore in 2025, a decline of around 6 per cent.

Around 31 per cent of surveyed households said they did not plan to make any discretionary purchases during the festive season, while 57 per cent expected to spend. The survey also found that 83 per cent of households planning to spend expected to dip into their savings to finance festive purchases.

The findings suggest that consumers are becoming more selective rather than abandoning festive shopping altogether. Clothing and fashion remained the most popular discretionary category, with 72 per cent of households planning to spend on them. Home appliances and furniture, as well as travel and holidays, attracted 45 per cent each, while gourmet food and gifting attracted 39 per cent.

This also highlights the difference between spending more money and buying more goods. A family purchasing a smaller sweet box or fewer gifts may still end up spending more than last year because individual products have become costlier.

For businesses, this creates a complicated festive environment. Retailers may continue to see customers visiting markets, but the average size of individual transactions could come under pressure. Sweet shops, dry-fruit sellers and gifting businesses are particularly exposed because their products depend heavily on discretionary festive spending.

The LocalCircles findings, however, reflect urban households' stated spending intentions rather than a final accounting of actual purchases. Spending patterns also vary across income groups and regions.

Diwali will continue to bring families together, with sweets, gifts and celebrations remaining central to the occasion. But when everyday essentials become more expensive, households have to make difficult choices about how much they can spend on the extras that make the season special.

The bitter truth behind the increasingly expensive mithai box is that its rising price is only one part of a much larger story. For many households, the challenge this Diwali is not simply affording their favourite sweets, but finding enough room in an increasingly stretched budget to celebrate as they did last year.