India is going on next-level consumption trends because of the GST rate change. The prices have come down on almost many goods, and that is raising the demand. On top of that, the timing is even more beneficial as the festive season comes up.
These factors have been rising and driving the demand of products and there by benefitting businesses. Well, if there is a rise in something, it definitely impacts something else, which we often miss out on. Well, if we try to understand how these rate changes are helping and benefitting the startup ecosystem, we will find some unique insights.
Now, rates have come down; that is helpful for customers. Because of the fall in prices, more volumes are being sold out, so that is helpful for sellers and companies. But one thing we are missing out on is the mode of payment. Yes, that is the key insight that most of us are missing out on. Many people prefer to buy and do transactions with the credit card.
Well, to support these statements, let me share with you some data points. India’s consumption engine is firing on all cylinders. According to lenders, daily average credit card spending has jumped fivefold to ₹20,000–25,000 crore from the usual ₹5,000–6,000 crore. This isn’t just a blip, but it’s the combined effect of GST relief bringing prices down, festive optimism, and aggressive e-commerce campaigns.
Financial institutions are seeing a massive impact already. The MD & CEO of SBI Cards said that consumer spending has grown in discretionary and non-discretionary categories, and this upward trend is likely to continue throughout the festive season. Not just him; even other top professionals of other financial institutions have admitted the impact. RBL Bank has seen a massive 20% increase in customer demand, and the BOB card logged a 40% jump in credit card spending in just two days compared to last month.
Now again, if you zoom out and see the clear picture, it all says the same. What ties all this together is credit adoption as the enabler. Consumers are not only buying more because prices fell; they’re also choosing to pay with credit, stretching affordability while capturing festive discounts.
This shift is creating a golden moment for startups. The surge in spending is not happening in isolation; it’s flowing through UPI, e-commerce checkouts, and digital wallets. Platforms like Flipkart, Amazon, and Myntra are not just selling more because prices dropped; they’re also benefiting from the ease of digital payments and the rise of credit-backed purchases. E-commerce platforms saw a big rush, with shoppers buying fashion and home essentials. TVs in the 43-inch and 55-inch range grew the most, with Super Plastronics reporting 30–35% higher sales, mostly through Flipkart.
Here’s where startups come into play. Fintechs offering UPI-linked credit, BNPL schemes, or instant EMIs are suddenly seeing their products become mainstream. Even Paytm recently rolled out its own credit line, tapping into this appetite for affordability. New-age credit card players, challenger NBFCs, and embedded finance startups are all finding that GST-led consumption growth translates directly into higher transaction volumes, more cross-sell opportunities, and better unit economics.
In simple terms, GST 2.0 didn’t just lower the cost of goods; it also unlocked a faster adoption of digital credit. For startups, that means a bigger customer base willing to spend online, experiment with flexible payment modes, and stay engaged longer. The festive boom is only the visible start; the real impact will be how these digital credit habits stick, driving sustainable growth for India’s fintech and lending ecosystem.
Not even because of the GST 2.0, but even before that, if we do a deep analysis of the fintech companies’ performance. Many fintech companies that have reported profits are from the lending backdrop. Because the demand for lending is so high in India. Not just for the digital purchases, but even for personal, home, and business loans, a lot has been disbursed over the period, which in turn is helping startups to earn more financing revenues.
They get good margins, and that is helping them to report profits. With credit card spending jumping 5× and consumer demand up across banks, it’s clear that credit is powering this consumption surge. Startups in the BNPL (Buy Now, Pay Later) and instant credit space are the biggest winners here. Companies offering split-pay, micro-EMIs, and app-based credit lines suddenly find their products more relevant than ever.
By making high-ticket purchases like smartphones, fashion, or travel easier to pay for, these startups are not just riding the festive boom but also building long-term stickiness with users who now see credit as a default payment mode. All these put together triggered the demand for credit in India. From UPI players to BNPL innovators and e-commerce enablers, India’s startup ecosystem is now riding a structural wave that could redefine digital consumption habits well beyond this festive season.
