India's consumption engine continues to roar well beyond the Diwali festivities, with digital payment platforms showing remarkable resilience in November. Contrary to typical post-festival spending patterns, daily digital transactions have actually increased compared to October levels, signaling sustained consumer demand in the economy.
Steady Growth in Digital Transactions
The latest data from the Reserve Bank of India reveals that Indians spent an average of ₹96,017 crore daily through digital channels during November 1-21. This represents a significant increase from October's daily average of ₹94,385.85 crore and September's ₹89,675.18 crore. The growth trajectory has been consistent since August, indicating a strengthening trend in digital payment adoption and consumer spending.
When compared to the same period last year, the growth becomes even more apparent. In 2024, October recorded daily spends of ₹82,578 crore, while November reached ₹77,572 crore. Interestingly, even during the peak Diwali week of October 18-24, average daily spending stood at ₹85,228 crore, which is substantially lower than current November levels.
Beyond Consumption: Understanding the Numbers
While digital payments serve as a reliable indicator of on-ground consumption, experts caution that the headline numbers now capture more than just daily spending. A substantial portion includes other financial activities such as debt repayments and investment flows through UPI platforms.
In October alone, consumers paid ₹50,614 crore to debt collection agencies and purchased digital gold worth ₹2,290 crore. Additionally, the National Payments Corporation of India (NPCI) data shows that nearly 50% of all UPI transactions fall into an undefined 'others' category, complicating pure consumption analysis.
Madan Sabnavis, Chief Economist at Bank of Baroda, emphasized the positive trend, stating, "This is an indication that consumption has definitely picked up. Typically these transactions would be for consumer goods, fast-moving consumer goods, durable goods, including automobiles to a certain extent."
Sector-Wise Spending Patterns Reveal Broader Trend
Category-level data provides clearer insights into consumption patterns. Electronics purchases through UPI reached ₹12,175.87 crore in October, marking a 25% increase from the same period last year. Groceries and supermarket spending, one of the largest categories, climbed to ₹76,073.21 crore in October from ₹66,408.93 crore in September.
The restaurant sector also showed robust growth, with UPI payments hitting ₹37,640.5 crore in October, representing a 26% year-on-year increase. These figures suggest that discretionary spending is driving much of the growth momentum.
Vishwas Patel, Joint Managing Director of Infibeam Avenues Ltd and Chairman of Payments Council of India, confirmed the trend, noting "continuous momentum on digital spending even after October," partly aided by GST cuts and festive purchases.
UPI Dominance and Future Outlook
The Unified Payments Interface (UPI) continues to overshadow all other digital payment instruments, accounting for 94% of digital payments by value in November. Credit cards maintain their strength in e-commerce and high-value purchases, while debit cards and prepaid payment instruments are gradually losing ground to UPI for smaller transactions.
Market share data reveals the shifting landscape: credit cards, debit cards, and prepaid instruments collectively held a 7.4% market share by value in November 2024, which slipped to 5.9% by November 2025.
Industry experts remain optimistic about the continuation of this trend. Sabnavis added, "Based on the digital payment numbers, there definitely has been an upward trend in consumption. There is reason for us to be hopeful that this will carry on for the next couple of months as November and December are typically the wedding season."
Independent fintech expert Parijat Garg expects the momentum to hold, noting that "the last quarter would see spending towards travel, wedding, insurance etc and so this momentum should continue." The rapid penetration of UPI into tier-two and tier-three cities continues to expand the base of digital transactions, with UPI transactions growing at a compounded annual growth rate of 49% between FY23 and FY25 according to Care Ratings.
