Consumer sentiment rebounds after festive season, risks remain

India’s consumers are beginning to feel—and spend— better again.

- Niti Kiran & Abhinava Saha

After months of caution, sentiment has turned positive in the wake of the festival season, helped by policy easing, lower inflation, and improving urban incomes.

The key question now is whether this rebound marks the start of a sustained consumption upcycle, or a temporary lift driven by deferred demand and policy tailwinds.

That optimism is visible in the data. The Centre for Monitoring Indian Economy's Consumer Pyramids Household Survey (CPHS) shows a steady post-festive recovery in confidence. The Index of Consumer Sentiments (ICS) rose 2.4% in October and a further 2.2% in November. The index grew at an average 2% between June and August.

While both rural and urban India saw an improvement, the rebound is clearly city-led: urban sentiment surged, while rural gains were marginal.