Retail in Asia

In Markets

India rate cut tempts shoppers to buy new cars, major appliances

India kicks off its two-month religious festive period on Monday, a time considered auspicious to buy big-ticket items such as cars, and when promotions abound. Company executives say they see the Reserve Bank of India’s unexpectedly sharp 50 basis points cut last month as a lifeline.

Consumers have already been showing an eagerness to spend more on small luxuries, like movie tickets and fancy hair cuts, even as the overall economy struggles to take off after a period of cooler growth.

Yet with retail spending accounting for 50 to 60 percent of the economy, India needs households to splurge on more expensive, higher-margin items like washing machines, TVs and cars.