Diwali gets costlier: Why rising milk, ghee, butter and dry fruit prices are squeezing festive budgets

Diwali celebrations are set to put additional pressure on household budgets this year, with rising prices of everyday ingredients making festive preparations more expensive. From homemade laddoos and barfis to boxes of kaju katli and other traditional sweets, higher raw material costs are pushing up expenses for households and sweet manufacturers preparing for the festive rush.

The impact extends beyond mithai counters. Higher prices of cooking essentials, along with the cost of LPG used in household kitchens, are adding to the expense of preparing festive meals. India had also faced LPG supply shortages earlier this year amid the conflict in the Middle East, creating additional pressure on consumers ahead of the festive season.

Why are dairy products getting more expensive ahead of Diwali?

Dairy products are among the key ingredients used in festive sweets and preparations. Recently, dairy majors Amul and Karnataka's Nandini have raised prices amid a seasonal surge in demand, while supply constraints have made some products increasingly difficult to find.

Tamil Nadu has also announced a price increase, marking the first such revision by the state-run dairy cooperative under Chief Minister C Joseph Vijay's government.

Sources told the Times of India that Amul's 1-kg ghee carton now costs ₹680, compared with ₹630 earlier. Its 500-gm pure ghee pouch is priced at ₹345, up from ₹325.

Butter prices have also increased. The 100-gm pack now costs ₹66, compared with ₹63 earlier, while the price of the 500-gm pack has risen to ₹325 from ₹310.

The price increases have coincided with supply constraints. Amul's online platform lists different varieties of ghee between ₹700 and ₹740 per litre, with some products, including pure and buffalo ghee, marked as sold out, The Times of India reported.

Meanwhile, the Bengaluru Milk Union (BAMUL) revised prices of Nandini ghee, butter, paneer and Trupti milk from November 4, following the Karnataka Milk Federation's (KMF) recent increase in milk and curd prices.

Under the revised rates, Nandini ghee costs ₹425 for a 500-ml pack and ₹850 for a one-litre pack. Salted butter is priced at ₹90 for 100 grams and ₹380 for 500 grams. Paneer costs ₹115 for 200 grams and ₹485 for one kg.

In Tamil Nadu, state-owned dairy cooperative Aavin has increased prices of ghee, butter, curd, milk-based sweets, lassi and cookies. Its 100-ml ghee pack now costs ₹95, compared with ₹80 earlier, while the price of the 200-ml pack has increased from ₹160 to ₹180.

This is the first price revision by the cooperative under Vijay's government.

However, the increase in input costs is not restricted to dairy products. Dry fruits, another key ingredient in festive sweets and gifting hampers, have also become significantly more expensive, TOI reported.

Almonds, pistachios and cashews: Dry fruit prices climb ahead of Diwali

Prices of nuts and dry fruits are hovering at record highs this festive season, rising by as much as 70% over the past year despite the reduction in goods and services tax (GST) in September 2025, ET Bureau reported.

Pistachios have become 60-70% more expensive since last Diwali, while almond prices have increased by 20-40%, depending on the variety.

Peshawari pistachios, widely used in Indian sweets, have touched a record ₹4,000 per kg, rising around 40% over the past six months. Wholesale prices of in-shell pistachios have climbed nearly 74% year-on-year to ₹1,650 per kg.

Cashew prices have increased by 5-8% over the past year, while raisins have become 2-5% costlier. Dates have registered a 5-10% increase, and anjeer (dried figs) prices have risen by 5-15%, according to trade data.

Importers said sourcing nuts and dry fruits from Iran and Afghanistan has become increasingly challenging amid supply disruptions linked to the US-Iran conflict.

Rising costs prompt companies to cut back on Diwali gifts

The increase in input costs is also affecting corporate gifting, an important source of festive business for sweet manufacturers and the packaging industry.

Rising ingredient and packaging costs have pushed up the prices of sweets and premium hampers by at least 15%, prompting companies across sectors, including pharmaceuticals, automobiles and fast-moving consumer goods (FMCG), to reduce their gifting lists and opt for smaller packages, TOI reported.

Companies typically place bulk orders for Diwali gifts for employees, clients and business associates, making corporate gifting an important source of seasonal demand for manufacturers and retailers.

Retailers said decorative boxes, customised packaging and presentation have become important components of corporate gifting, adding to the overall cost of orders.

Food inflation adds to pressure on festive budgets

The rise in ingredient prices comes amid elevated food inflation. In September, annual retail food inflation accelerated to 7.74%, pushing headline inflation to 5.54%, close to the Reserve Bank of India's upper tolerance limit of 6%.

Inflation in sugar, confectionery and desserts accelerated to 13.8% year-on-year in September, compared with 10.9% in August and 3.4% in January, according to data from the Ministry of Statistics and Programme Implementation.

Sugar prices rose 29.8% year-on-year in September, compared with 24.3% in August. Inflation in prepared sweets, excluding milk-based products, candy prices, ready-made food and namkeen also increased, TOI reported.

The Reserve Bank of India (RBI) has flagged concerns over broadening price pressures across the economy. At its monetary policy review earlier this month, members cautioned that inflation was spreading beyond a handful of categories.

RBI Governor Sanjay Malhotra noted that 37% of items in the consumer basket recorded inflation of over 4% in August, compared with 20% in March. This indicated that price pressures were affecting a wider range of goods and adding to the strain on household budgets.

With dairy products, dry fruits and other food ingredients becoming more expensive, households and businesses face higher costs as they prepare for the festive season.