Rising Commodity Prices Drive Diwali Sweet Inflation Across India

Rising commodity prices have triggered a nationwide sweet-inflation rate exceeding 9% across India during the Diwali festival season. Sugar prices have increased nearly 30% compared to the previous year, while refined cooking oil, raisins, and nuts have seen price hikes between 9% and 15%.

In New Delhi, confectionery shops are responding to these cost pressures with varying strategies. Bengali Sweet House increased prices by up to 10% to maintain margins, while House of Kaleva absorbed most of the costs, raising prices by only 3%.

The Government of India attempted to stabilize the market in August by implementing duty-free raw sugar imports, limiting dealer holdings, and banning the diversion of sugar to ethanol production. However, these measures are being offset by an El Niño-linked rainfall deficit that threatens the 2026-27 sugar-cane production season.

Economists from ICRA Limited predict that broad-based food inflation will remain high, potentially exceeding 8%, as the high demand for sugar typically persists through January.