Diwali gets expensive: Why rising prices of milk, ghee, butter and dry fruits squeeze festive budgets

Diwali celebrations are set to put further pressure on household budgets this year as rising prices of everyday ingredients make 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 spending by households and sweet makers gearing up for the festive rush.

The impact goes beyond the Mithai counters. Higher prices of kitchen utensils, along with the cost of LPG used in domestic kitchens, increase the cost of preparing holiday meals. India also faced LPG supply shortages earlier this year amid conflict in the Middle East, putting further pressure on consumers ahead of the festive season.

Why is dairy more expensive than Diwali?

Dairy products are among the key ingredients used in holiday sweets and preparations. Karnataka-based dairies Amul and Nandini have recently hiked prices due to a seasonal increase in demand, while supply constraints have made it increasingly difficult to find some products.

Tamil Nadu also announced a price hike, the first such revision by the state milk cooperative under Chief Minister C. Joseph Vijay.

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Sources told Times of India that Amul’s carton of ghee now costs 1 kg ₹680 compared to ₹630 earlier. Its 500g pure ghee pouch has a price tag ₹345, above from ₹325.

Butter prices also increased. 100g pack now costs ₹66 compared with ₹63 earlier, while the price of a 500g pack has gone up to ₹325 from ₹310.

The rise in prices coincided with a reduction in supply. Amul’s online platform lists various types of ghee among them ₹700 a ₹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) has revised the prices of Nandini ghee, butter, paneer and Trupti milk from November 4 following the recent hike in milk and curd prices by the Karnataka Milk Federation (KMF).

As per revised rates, ghee costs Nandini ₹425 for a 500ml pack and ₹850 for a one liter pack. Salted butter is included in the price ₹90 per 100 grams and ₹380 for 500 grams. Paneer costs ₹115 for 200 grams and ₹485 for 1 kg.

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

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

However, the increase in input costs is not limited to dairy products. Dry fruits, another key ingredient in festive sweets and gift baskets, have also gone up in price significantly, TOI reported.

Almonds, pistachios and cashews: Prices of dry fruits rise ahead of Diwali

Prices of nuts and dry fruits are at record highs this festive season and have risen by as much as 70% over the past year despite the reduction in the Goods and Services Tax (GST) in September 2025, ET Bureau reported.

Pistachios have gone up by 60-70% since last Diwali, while almond prices have gone up by 20-40% depending on the variety.

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

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

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Importers said sourcing nuts and dried fruit from Iran and Afghanistan has become increasingly difficult due to supply disruptions related to the US-Iran conflict.

Rising costs are forcing companies to cut back on Diwali gifts

The increase in input costs also affects corporate gifts, which are an important source of holiday business for candy manufacturers and the packaging industry.

Rising costs of ingredients and packaging have increased the prices of sweets and premium baskets by at least 15%, prompting companies across sectors including pharma, auto and fast-moving consumer goods (FMCG) to pare down their gift lists and opt for smaller packaging, TOI reported.

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

Retailers reported that decorative boxes, customized packaging and presentation have become important components of corporate giftware, increasing the overall cost of orders.

Food inflation puts pressure on holiday budgets

The rise in ingredient prices comes amid increased food inflation. In September, year-on-year retail food inflation accelerated to 7.74%, taking headline inflation to 5.54%, close to the Reserve Bank of India’s upper tolerance limit of 6%.

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

Sugar prices increased by 29.8% year-on-year in September compared to 24.3% in August. Inflation of ready-made sweets, excluding dairy products, prices of confectionery, ready meals and namkeen also increased, TOI reported.

The Reserve Bank of India (RBI) has expressed concern about rising price pressures across the economy. In their review of monetary policy earlier this month, members warned that inflation was spreading beyond several categories.

RBI Governor Sanjay Malhotra noted that 37% of consumer basket items saw inflation above 4% in August compared to 20% in March. This suggested that price pressures were affecting a wider range of goods and putting pressure on household budgets.

With rising prices for dairy products, dried fruit and other food ingredients, households and businesses face higher costs in preparation for the holiday season.