08 October 2025, Mumbai
The just concluded Durga Puja season has underscored the shifting fault lines in Eastern India’s retail economy. What was once a festival that brought prosperity to every corner of the market from high-end malls to the smallest pavement stalls has now become a mirror reflecting a widening divide.
This year’s festive economy, valued between Rs 46,000 crore and Rs 50,000 crore, grew around 10-15 per cent over last year, marking one of the strongest post-pandemic recoveries for the region’s fashion, apparel, and textile ecosystem.
Yet beneath this buoyant headline lies a story of two sharply contrasting realities, one of record-breaking sales in organized retail, and another of deep distress for unorganized traders and small retailers.
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The organized sector’s triumphant season
For organized players like, malls, branded outlets, and e-commerce giants Durga Puja 2025 was nothing short of a windfall. Shoppers returned in droves, wallets open and spirits high.
Major malls in Kolkata such as South City, Quest, and Acropolis reported double-digit growth in fashion and apparel sales, clocking as much as 22 per cent year-on-year growth.
Retailers noted that the consumer mindset had decisively shifted toward ‘experience spending’ a combination of indulgence and convenience.
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“People are not just buying clothes; they’re buying experiences,” says Ritu Agarwal, Regional Head (East) of a leading national retail chain. “Our footfall rose by 30 per cent compared to last year. Consumers now plan their festive shopping like an event visiting malls, dining out, and capturing it all on social media.”
E-commerce too saw record numbers.
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Industry trackers estimate that online fashion sales in Eastern India grew 23-25 per cent year-on-year during the first week of October. Discount-driven campaigns, influencer-led brand promotions, and next-day delivery promises turned digital platforms into major beneficiaries of the festive boom.
Meanwhile, offline organized retail also benefited from pent-up demand and a desire for social connection after years of muted celebrations. “After 2020 and 2021, this is the first time we’ve seen people truly celebrate without hesitation,” noted Anirban Dey, a Kolkata-based retail consultant. “It’s not just about recovery, it’s about renewed confidence.”
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The unorganized sector’s struggle
The scenario, however, was very different on Kolkata’s College Street, Gariahat, and Hatibagan markets, the nerve centres of Eastern India’s unorganized retail sector.
The National Hawkers Federation (NHF) reported a grim picture: street vendors’ income declined by nearly 40 per cent compared to pre-pandemic levels.
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“We can’t afford to sell our products at a loss,” said Shaktiman Ghosh, President of the NHF. “The online platforms have eaten into 40 per cent of our income. Even small shopkeepers who depend on loyal local customers have suffered badly.”
This decline is part of a broader structural challenge. India’s retail industry is still overwhelmingly unorganized. over 90 per cent of retail outlets are small, family-run shops and vendors. Yet their competitive edge has eroded under pressure from e-commerce discounts, GST complexities, and changing consumer preferences.
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Why small retailers are losing ground
There are several reasons why small retailers are losing business.
Price wars and deep discounts: Large organized players wield the advantage of scale. ‘Buy One Get One’ deals, cashback offers, and heavy online discounts have conditioned consumers to expect price cuts that small vendors simply can’t afford.
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Lack of digital presence:: Most local traders operate offline, with limited exposure to digital marketing or e-commerce tools. The absence of an online footprint has effectively excluded them from the fastest-growing retail channel.
Experience over transaction: Consumers increasingly value comfort, ambience, and brand assurance. Malls and chain stores offer air-conditioned environments, curated displays, and flexible payment options creating a premium shopping experience that traditional markets struggle to replicate.
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GST reform challenges: While the recent Goods and Services Tax (GST) rationalization aimed to streamline taxation and reduce the burden on affordable apparel, the immediate effects have been uneven. Small traders holding pre-reform stock bought at higher rates are struggling to stay price-competitive.
GST reforms, A catalyst and a complication
The GST reforms rolled out in mid-2025 have been among the most consequential in recent years. The government’s move to unify the GST rate on garments priced up to Rs 2,500 at 5 per cent has significantly boosted demand in the value-for-money segment. “Earlier, the Rs 1,000 price threshold was a barrier for affordable fashion,” explained Sanjay K. Jain, former Chairman of the Confederation of Indian Textile Industry (CITI). “This rationalization has brought parity and encouraged spending among middle-income consumers.”
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Also, the reduction of GST on man-made fibers and yarns to 5 per cent has resolved the long-standing issue of the inverted duty structure, where input costs were taxed higher than finished goods. This is expected to improve working capital and encourage more domestic production in the MMF segment an important aspect of India’s export competitiveness.
However, not all impacts have been positive. The introduction of an 18 per cent GST on garments above Rs 2,500 has placed pressure on premium and designer labels. “For aspirational buyers, this could mean trading down or delaying purchases,” said Nidhi Sinha, retail analyst at Wazir Advisors. “Brands will now have to innovate offer limited editions, better quality, or unique experiences to justify higher prices.
The changing consumer pulse
The season also revealed evolving consumer behavior. In cities like Kolkata, Siliguri, and Bhubaneswar, young consumers between 20 and 35 years accounted for nearly half of all fashion purchases this Puja. Social media influence, easy credit, and the rise of quick commerce apps have made impulse buying a norm.
“Gen Z doesn’t just want discounts they want discovery,” said Rohan Mukherjee, Head of Marketing at a major fashion e-commerce platform. “Limited-time collections, celebrity collaborations, and Instagram-worthy experiences are driving festive fashion demand.”
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A region in transition
Durga Puja 2025 may well go down as a defining moment for Eastern India’s retail economy. On one hand, it showcased the resilience of consumer demand and the effectiveness of GST-driven reforms in boosting the formal retail ecosystem.
On the other, it exposed the growing fault lines between organized and unorganized sectors a divide that could reshape the retail map of the region in the coming decade.
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The challenge ahead lies in inclusion. Policymakers and industry bodies are now being urged to help small retailers adopt digital tools, access easy credit, and participate in online marketplaces. Without such integration, the traditional markets that give Bengal its cultural and economic identity risk being left behind.
“Durga Puja has always symbolized renewal and victory over adversity,” says Saktiman Ghosh of NHF. “But for many small traders this year, the battle is far from over.
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