Dear Readers,

It was lovely to see my colleagues in traditional attire, wearing sarees, kurtas, bandhgalas and khadi jackets this week. They were playing Housie, making rangolis, colouring diyas, and decorating their desks. Our HR and admin teams organised a few games as a warm-up to Diwali.


I am sure it is the same at your office too, with pre-Diwali parties, laughter and the joy of being together. The excitement, the delicious food, the glittering faces and all those selfies for memories really help strengthen our bond.

At the same time, some colleagues were constantly checking the waiting list on the IRCTC website, hoping to make it home in time for Diwali. The anxiety and struggle to get a train, bus or flight ticket is hard to describe.
I admire the effort people put into reaching home during the festival. I wish them all a happy and safe journey.

Financing the Festival Demand

Diwali is the most important time for Indian businesses, but this year it feels even more critical. After the Trump tariffs, export businesses have suffered sharply. The gems and jewellery and textile sectors are particularly worried.


Although rising gold prices are helping jewellers, the number of buyers is quite low. Silver has also risen, which might further impact demand. The surge in precious metal prices has changed consumer behaviour, and experts are finding it hard to predict how demand will shape up this year.


This is also the busiest period for finance companies as demand for loans rises. They are trying to distribute and disburse loans as quickly as possible. I would not be surprised if someone managed to buy crackers on EMI. Banks have partnered with various fintechs, NBFCs, platforms and marketplaces to offer quick loans and consumer durable financing. Bank of India has even reduced its home loan rate by a few basis points, while several others have rolled out special offers on car loans. Many ba nks have also redesigned their co-branded credit cards.

A report by Zeta projects that the co-branded credit card market will triple by 2028. Federal Bank and Fi have launched a weekend credit card that offers 20 percent discounts on most e-commerce platforms.

Credit card companies are also pushing hard to drive consumption. The real competition is visible across e-commerce and quick commerce platforms. From Amazon’s Great Indian Festival and Flipkart’s Big Billion Days to Swiggy and Zomato, the race is intense.


Businesses and the government are both hoping for a consumption boost, helped by the benefits of GST 2.0. Affordable travel has increased and now outpaces luxury travel, according to a Thrillophilia report. Delivery agents are racing through lanes and bylanes to deliver as many goods as possible, each delivery adding to their commission.

Traders’ body CAIT expects Diwali sales to hit a record Rs 5 lakh crore. Bank of Baroda estimates festive-season consumption at Rs 12–14 lakh crore, led by electronics, automobiles and clothing. Analysts believe that GST reduction has been the main driver of this consumption push.

India and the World Economy

The world is going through uncertain times. Hamas' handing over hostages is being rejoiced, but it has come at what cost? Trade balance has been a major casualty and the majority of the countries are worried about the future.


India, though the fastest-growing major economy, is not entirely immune to these pressures. Our situation is better, but we cannot afford to be complacent. The market has shown positivity, but there remains a fear of a possible correction.


There is a flood of IPOs. Large foreign firms such as LG are getting listed, and foreign capital continues to flow into India. These are positive signs, but core manufacturing growth remains sluggish, and that means job creation is still limited. Inflation and interest rates are low, and GST collections are rising, which are all encouraging signs.

The result season has begun, and early numbers from Bank of Maharashtra, Axis Bank, Indian Bank, and Indian Overseas Bank indicate a pick-up in the credit cycle. Three developments caught my eye this week: Google’s plan to invest 15 billion dollars in Vizag, the start of Mumbai’s much-awaited Aqua Line underground metro, and the listing of LG and Tata Capital.

India Inc Festival Hopes

For India Inc, this festive season feels like a make-or-break moment. After months of uneven demand and margin pressures, most companies are counting on Diwali cheer to lift sales and sentiment. Automakers, real estate players, electronics brands and retailers are all hoping that easy credit, salary hikes and endless offers will get people to spend freely again.


Many see this period as more than just a sales boost, but it’s also a signal of how confident households are feeling about their finances. A strong festive season could set the stage for better growth and investment momentum in the months ahead.

A recent KPMG report suggests that Indian CEOs are betting big on AI and believe talent acceleration will be the next growth engine.

My View

While everyone hopes for growth and stronger consumption, I still feel the ground reality is more complex. I had written earlier about miscellaneous inflation, and the trends remain worrying.

Credit card debt is rising, personal loans are increasing and gold loans are growing. Urban areas are showing signs of slower consumption. These indicators may look positive for growth on the surface, but they also reveal a darker side. Expanding debt is not always a healthy sign.

Well, I recently interviewed Aswath Damodaran, who said that the Indian market appears overvalued. Do take a look at that conversation.

ALSO WATCH - Aswath Damodaran: Indian market still overvalued, Trump tariff impact likely short term

Have a safe and happy Diwali. I wish you all a joyful festival and a prosperous new year.
Do share your best Diwali memories. I would love to hear them. Enjoy the festive meals and sweets, but keep an eye on that sugar intake.

Note: I will be on leave next week, so the newsletter will take a short break. See you the following Friday.

Please share your feedback, suggestions if any. You can reach me on amol.dethe@timesinternet.in and follow me on LinkedIn at ETBFSI Digest.

As usual, I am adding here the top 5 stories of the week, trust you will find them meaningful.

1. Banks to clear cheques in three hours; RBI sticks to January 2026 deadline
2. Canara HSBC Life to maintain tech spend at 10%, bets on AI, Cloud for efficiency gains
3. The BFSI Show: What is RBI's view on Stablecoin?
4. Corporates are trying to replicate Uber-like seamless payments: Bank of America’s Phil Carmalt
5. RBI advisory prompts Axis Bank’s Rs 1,231 crore standard asset provision on farm loans; expects reversal by FY28

Happy Reading
Amol Dethe,
Editor,
ETBFSI

(Editor's note is a column written by Amol Dethe, Editor, ETBFSI. Click here to read more of his articles exploring several buzzing topics)

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