As Diwali approaches, brightly coloured boxes of sweets are filling shop shelves, offices and homes across India. Exchanging sweets is one of the festival’s most cherished traditions, but this year, celebrating the occasion is becoming more expensive.
The rising cost of essential ingredients, particularly sugar, cooking oil and dry fruits, has pushed up the prices of traditional Indian sweets. Sugar, a key ingredient in almost every Indian confectionery, was nearly 30% more expensive in September compared with the same month last year. Refined cooking oil used for frying recorded an increase of around 15%, while raisins became 10% costlier and nuts saw a 9% rise. These increases are significantly higher than the country’s overall inflation rate.
The impact of rising ingredient costs is evident in sweet shops across central New Delhi, where businesses are preparing for a surge in customers ahead of Sunday, when most people will celebrate Diwali. Shop counters are filled with a wide variety of mithai, the traditional Indian sweets made using milk, nuts, flour, sugar and ghee.
While the sweets look tempting, their price tags are becoming increasingly difficult for customers to ignore.
Varjesh Aggarwall, managing partner at Bengali Sweet House, a popular Delhi establishment founded in 1937 during British rule, said rising ingredient costs had forced the business to increase prices, although the hike had been kept below 10%.
“All the commodity prices have increased and obviously impacted us,” said the 58-year-old. Also Read | Karnataka Sugarcane Crisis: CM Calls for Joint Effort to Resolve Farmers’ Incentive Demand
Across the country, inflation in sweets has crossed 9%, according to official data. This is a significant concern in India, which is the world’s largest consumer of sugar and the second-largest producer. The rising prices have also prompted government intervention.
In August, the government permitted sugar mills and refiners to import raw sugar duty-free after domestic prices touched record levels. Authorities also introduced limits on the quantity of sugar that dealers and bulk consumers could stockpile. In addition, mills were urged to keep prices under control during the festival season, while the diversion of sugar for ethanol production was prohibited.
Although these measures helped ease some of the pressure, their impact has been offset by an El Niño-related rainfall deficit, which threatens sugarcane production during the 2026-27 season.
Rising Costs Challenge Sweetmakers During Festival Season
For sweet manufacturers and retailers, the situation has created a difficult business decision during Diwali, one of their most important sales periods. They must either pass on the increased production costs to customers or absorb the additional expenses by compromising their profit margins.
Vijay Shankar Agarwal, 43, a manager at House of Kaleva in central Delhi, where he has worked for 25 years, said the business had absorbed most of the additional costs.
“We have absorbed all the losses,” he said, adding that prices had increased by only around 3%. However, customers visiting sweet shops across the capital have already begun noticing the difference.
Poosa Ramesh, a 25-year-old business analyst, was shopping with her mother at Nathu’s in Bengali Market to purchase sweets for friends and relatives. She observed that prices had increased by Rs. 20-30 per box in just one week.
Some customers also believe that rising prices are accompanied by a reduction in product quantities. Tarun Johri, a 59-year-old lawyer who purchased 40 boxes of dry fruits for Diwali gifting from another shop, said that some packages had become more expensive while containing smaller quantities.
Inflationary Pressure Likely to Continue
The price situation could become more challenging in the coming months. Economists surveyed by Bloomberg News expect India’s headline inflation to reach 6.1% in the final quarter of this year, compared with 5.5% in September. Food and grocery prices are expected to rise even faster.
Aditi Nayar, chief economist at credit rating agency ICRA Ltd., expects food inflation to remain broad-based and exceed 8%.
These projections indicate that consumers may continue to face higher prices as India’s festival season progresses through the coming months.
Sugar demand in India generally remains high from August through January, driven by increased consumption during festivals and other celebrations. This sustained demand, combined with concerns over domestic sugarcane production and higher input costs, could keep prices under pressure.
For millions of Indian families, exchanging boxes of sweets with friends, relatives and loved ones remains an inseparable part of Diwali celebrations. However, this year, the rising cost of sweets is offering consumers a direct experience of the country’s growing inflationary pressures.
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