Last year, India’s consumer durables industry entered the festive season with a tailwind: lower prices after a cut in goods and services tax (GST) rates. This year, retailers are betting that discounts, easy financing and premium products can keep shoppers spending even as smartphones and other consumer goods become significantly more expensive.
“We expect around 8-10% growth in the season from last year,” said Nilesh Gupta, director and managing partner at Vijay Sales, adding that the Independence Day sale had provided a strong start.
Retailers are also seeing consumers trade up rather than retreat from spending altogether.
“Despite selective price increases, consumer intent remains strong across lifestyle, entertainment and productivity-led categories, with a clear preference for premium, feature-rich products,” said Shibashish Roy, chief executive officer and managing director of Infiniti Retail Ltd, which operates Croma stores.
But higher prices could make demand less predictable, particularly among price-sensitive consumers. Smartphone prices rose roughly 15% by the end of the first quarter, said Bharat Birla, executive director at Anand Rathi Advisors. “Elasticity is untested at these prices,” he said.
“Mobile growth has been driven by premiumization from FY20 to FY25 and not by volume, owing to high penetration in the category,” Birla said. He expects that trend to continue as consumers typically move up the value chain. EMI financing, he added, should cushion the impact of higher prices.
Prices have risen across consumer-durable categories. LG Electronics India raised prices by a cumulative 16-17% in two rounds during April-June (Q1FY27), across its portfolio, while Blue Star raised prices by 5%. Crompton Greaves Consumer Electricals raised prices by high-single digits to low-double digits.
Premium demand holds up
There are signs that consumers are willing to trade up. Amazon India’s Prime Day sale in June saw sales of premium TVs priced above ₹35,000 double from a year earlier, with demand shifting towards larger screens of 65 inches and above, the company said.
Artificial intelligence (AI)-enabled PCs accounted for one in five Windows laptops sold during the sale, while demand for newer kitchen products such as robotic vacuums, coffee machines and ice makers rose 4.3 times year on year.
The more recent Freedom Sale also showed strong demand, with Amazon India saying purchases across smartphones, electronics, home and kitchen were more than twice those of a normal day. An Amazon India spokesperson told Mint that customers were also opting for more premium products.
Anand Rathi expects premiumization to continue across TVs, washing machines and refrigerators as brands introduce AI-enabled products and other features.
“At the top end of the spectrum, a lot of brands have launched products with AI integration which is expected to continue the premiumisation trend across TVs, washing machines and refrigerators,” Birla said.
The squeeze is likely to be greater at the mid- and entry-level, particularly among price-sensitive aspiring consumers in tier 2 and other smaller markets. Consumers are more likely to become cautious with their budgets than trade down, Birla said, while exchange schemes and financing could help bridge the affordability gap. For some Anand Rathi clients, EMI financing accounts for around 50% of purchases across tier 1 and tier 2 markets.
Some large-ticket purchases have already been deferred ahead of the festive season.
Purchases of “large appliances such as side-by-side refrigerators and large-screen TVs above 32 inches” have been postponed in recent months, said Deenadayalan C, chief executive officer of Sathya Agencies, which runs more than 400 stores across southern India.
Kitchen appliances and entry-level smartphones could prove more resilient, according to Birla.
According to market research firm International Data Corporation, average selling prices of mobile phones in India rose 14.4% year over year in the second quarter of 2026 to a record $315.
The Diwali window
India’s months-long festive season typically begins with Independence Day and Rakshabandhan in August and peaks around Diwali in mid-November. With Diwali falling in November, brands and retailers will have a longer promotional window, from September to mid-November.
“We have seen whenever Diwali is in November, that gives a much larger festival window for sale and festival season to outperform, whereas last year it was in October,” said Sanjay Chitkara, director and co-chief sales and marketing officer at LG Electronics.
The sector is also entering the season with the benefit of last September’s GST rationalization. Consumer durable prices fell roughly 7-10% after GST on major appliances was reduced to 18% from 28%. Some consumers initially held back purchases, with sales picking up only towards the third quarter in FY26.
Anand Rathi Advisors expects the benefits of the tax cut to continue showing up with a lag, while the longer festive window should give brands, marketplaces and retailers more time to spread promotional schemes.
Manufacturers, meanwhile, face higher raw-material costs. Copper prices are up about 45% from a year ago and aluminium prices about 25%, according to industry estimates, prompting price increases.
Companies are also using new products to encourage upgrades. Crompton Greaves Consumer Electricals has launched its super-premium brand Rhion, with its first product—a water “biofier” using technology adopted in desalination plants—priced at an MRP of ₹42,000.
“Our estimate is that the revival will happen sometime end of August to September as the festival season begins,” B. Thiagarajan, managing director of Blue Star Ltd, said in an analyst call on 7 August. He expects demand to pick up significantly in Q3 and Q4 as the company rejigs its product portfolio.