India’s festive surge turns smarter as GST cuts and consented data reshape credit and consumption
✍️ Opinions
This article has been contributed by Amit Das, Founder & CEO, Think360.ai
This year’s festive season opens with two clear tailwinds: GST 2.0 and the mainstreaming of EMIs for big-ticket purchases. The 56th GST Council meeting set the implementation date and phased roll-out across goods and services, signalling lower effective tags for a wide basket of everyday items and durables. On the demand side, Redseer’s Festive 2025 outlook projects e-commerce gross merchandise value at INR 1.15 lakh crore+ over the season, indicating a healthy year-on-year lift.
EMI adoption has deepened alongside these price effects. Home Credit’s national study shows borrowing for smartphones and home appliances rising to 37% in 2024 from 1% in 2020, reflecting how households access technology and durables without large upfront outlays. Importantly, most “no-cost” EMIs are short-tenure constructs funded by brand or merchant subvention not long, interest-free loans an operating detail that shapes how lenders underwrite and manage cash flows. In parallel, lenders are leaning on real-time, consented bank data via the Account Aggregator (AA) framework; Sahamati’s FY25 impact report estimates INR 1.67 lakh crore in AA-enabled disbursals across 1.89 crore loans, making verified cash-flow data a mainstream input to instant credit decisions.
Electronics remains the engine of online demand. Redseer expects the season’s GMV to clear INR 1.15 lakh crore, with value-seeking and upgrades both in play as GST 2.0 transmits to tags and financing normalises affordability. In home durables, the combination of lower effective prices and easy EMIs is compressing decision cycles: households are moving to better configurations while keeping monthly outlays steady an archetypal “up-tiering” response when effective prices fall (context via PIB/GST Council and financing patterns in Home Credit 2024). Two-wheelers, too, are beginning to reflect the effects of policy pass-through. As rate rationalisation takes hold, affordability across the main consumer segments is gradually improving. That said, the rollout has been deliberately slow, following the GST Council’s phased timeline, so changes are only showing up gradually on the ground.
Challenge: Managing Credit Risk Amid Rising Demand
The real headache for lenders, though, has been managing credit risk as demand picks up. Back in November 2023 the RBI tightened the screws on unsecured consumer lending: risk weights for these loans were jacked up to 125%, and credit-card exposures became significantly more capital-hungry (150% for banks; 125% for NBFCs). The upshot is straightforward, unsecured lending suddenly looks a lot more expensive for institutions. New originations have cooled, not dramatically but noticeably, and lenders are hedging their bets by tilting portfolios toward secured loans and lower-risk products. In short, affordability is improving a touch for buyers, but banks and NBFCs are being more selective about who gets credit and on what terms.
What does this mean in practice? Lenders have to use up more capital for these loans, right when everyone wants to buy. In practice, lenders respond by being more selective on approvals, moderating initial limits, and favouring short-tenure, subvention-backed “no-cost” EMIs with tighter loss windows aligning portfolio quality with capital efficiency (RBI circular above; EMI constructs in Home Credit 2024).
Festive Demand Surge vs. Credit Risk
Spikes in ticket sizes from smartphones and home appliances to entry-level cars are beginning to test the system. When loan approval filters loosen even slightly, these bigger-ticket loans can quickly show up as first-EMI misses, an early red flag for lenders.Recent bureau data underline why vigilance is growing. Personal loan growth slowed sharply to 8.7% year-on-year, touching INR 14.9 lakh crore in the first quarter of FY26. At the same time, analysts note a steady build-up in long-term stress (PAR 360+) and a visible shift in market share towards NBFCs, whose share in new loan originations (by value) has climbed from 38% in Q1 FY25 to 40.6% in Q1 FY26.
Real-Time Data Solution: Lenders are standardising a control stack that includes live approval-rate telemetry (TransUnion CIBIL – Credit Market Indicator), average ticket monitoring (CRIF – How India Lends, Jun 2025), and first-EMI success checks. At the same time, institutions are expanding AA-based bank-data pulls to reduce thin-file ambiguity and accelerate clean approvals; with INR 1.67 lakh crore routed through AA in FY25 across 1.89 crore loans, verified cash-flow data has moved from pilot to scale.
Ashwini
Future Outlook
Near-term demand looks resilient. GST-linked price relief plus frictionless, short-tenure EMIs should keep volumes buoyant into the next quarter, with a visible tilt toward better configurations as perceived value improves. The online channel’s momentum, as indicated by Redseer’s Festive 2025 forecast, supports a broad-based lift rather than a brand-specific spike. For lenders, the playbook to operate is quite straightforward: keep cut-offs dynamic using real-time approval signals (TransUnion CIBIL CMI), privilege shorter tenures where subvention economics apply (Home Credit 2024), and anchor instant decisions in consented bank data via AA so approvals rise without compromising delinquency bands (Sahamati Impact Report).
Conclusion
Festive 2025 is as much a test of discipline as it is a test of demand. GST 2.0 lowers effective prices; EMIs widen access; AA improves visibility. The task is to convert a seasonal surge into healthier portfolios: approve the right customer, on the right terms, with time-bound “no-cost” structures and verified cash-flow data. With persistent strain in certain pockets, lenders need to redouble efforts to strengthen underwriting levers, progressing on risk modelling and scaling digital-first recovery strategies for building long-term resilience. This shift demands not only more forceful intention but also the appropriate intelligence and infrastructure. Platforms like Think360.ai are activating forward-looking institutions to transform from reactive risk management into predictive, data-driven decisions and render resilience not just a goal, but an opportunity for competitive advantage. Done well, the outcome is stronger sell-through for brands, simpler affordability for households, and steadier credit performance into early 2026 exactly the balance the ecosystem should aim for.
Archana Karthikeyan
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