GST cuts to fuel 15-20% festive sales surge in electronics: Analysts

GST cuts have lowered electronics prices by 7-9 per cent, fuelling festive demand as consumers trade up to premium TVs and appliances and e-commerce giants push discounts

India's electronics sector is expected to experience a robust 15-20 per cent sales surge during the 2025 festival season, with roughly half the growth attributed to recent goods and services tax (GST) reductions that lowered rates on several categories from 28 per cent to 18 per cent, according to tax experts tracking the market. These apply to key categories like TVs, air conditioners, refrigerators, and dishwashers.

 

The GST relief, which translated into 7-9 per cent price drops for consumers, accounts for an estimated 8-10 percentage points of the festival sales boost, while the remainder stems from organic demand growth driven by economic recovery and rising disposable incomes, said Suresh Nair, tax partner for consumer products and retail at EY India.

 

The tax savings are prompting consumers to trade up to premium products, with buyers increasingly opting for larger televisions and high-end appliances they previously considered out of reach.

 

“The effective approximately 7-9 per cent savings is prompting ‘trade-up’ behaviour, where buyers opt for premium features like larger screens or energy-efficient models,” said Nair of EY. “There could be a reasonably higher shift toward TVs over 55 inches, as the savings offset the premium pricing gap. Similarly, uptick could be noticed for high-end appliances, with consumers citing the ‘extra affordability’ as a nudge from mid-range to premium segments.”

 

 Premium segments including large appliances and gaming devices—among the categories most affected by the GST reduction—are seeing volume growth of 10-15 per cent compared to last year's festive period, analysts estimated. 

 

They said e-commerce platforms are passing through the full tax savings to consumers while supplementing with additional promotional discounts as they aim to capture a high chunk of festive electronics share.  Offline retailers are also passing savings, but it appears they may be less aggressive due to higher operational costs. 

 

E-commerce giants Amazon and Flipkart have already started their flagship festive sales to tap India's festival shopping season, which is projected to grow 27 per cent to generate ₹1.2 trillion in total sales.  

 

Amazon's Great Indian Festival (AGIF) began at midnight September 22 for Prime members, with the general sale opening September 23. Early data from AGIF shows multi-fold growth across categories. From smartphones to large appliances, fashion and consumer electronics, Prime members have shopped for deals across categories. 

 

“Premium segments are performing exceptionally well, with smartphones, TVs, consumer electronics, fashion and beauty products by popular brands such as Apple, Samsung, OnePlus, Sony, LG seeing demand from customers even in smaller towns,” said Saurabh Srivastava, vice president, categories, Amazon India. “This is reinforcing our commitment to serve customers with unmatched selection and value across India.”

 

Amazon India unveiled a dedicated marketplace section highlighting products with reduced tax burdens as India’s goods and services tax (GST) restructuring took effect on September 22, positioning the e-commerce giant to capitalise on lower consumer prices across electronics, appliances and other categories.

 

Walmart-owned Flipkart, has also rolled out a dedicated GST Store on its app and website as part of a new campaign aimed at boosting customer savings. 

 

“At Flipkart, we see the GST 2.0 reforms as a game-changer that will drive consumption and unlock significant value for customers this festive season,” said Pratik Shetty, vice president, growth and marketing, Flipkart. “Especially in high-value categories like electronics and large appliances. Early trends already reflect a surge in interest, now that the reforms are here.”