Indian consumers are becoming more cautious about discretionary spending amid inflationary pressures and economic uncertainty, but demand for premium experiences and electric vehicles (EVs) continues to remain strong, according to Deloitte India’s latest Consumer Signals India report.

The report shows households are prioritising essentials, preserving savings, and spending more consciously, while still willing to pay for experiences and future-oriented purchases.

India’s financial well-being index (FWBI) rose to 111.1 in March 2026 from 109.1 a year ago, outperforming both the global average of 102.7 and the Asia-Pacific average of 102.0. The improvement suggests Indian consumers remain financially stable despite macroeconomic headwinds.

However, the willingness to make large purchases weakened. Only 65% of respondents said they were comfortable making big-ticket purchases, down 5 percentage points month-on-month, signalling growing caution around discretionary spending.

Why are Indian consumers turning cautious?

The findings come at a time when inflation concerns are intensifying across essential categories. Around 73% of Indian consumers expect prices to rise further next month, with anxiety particularly high around utilities and fuel costs. Concern over gasoline and fuel prices surged 11 percentage points year-on-year, while worries around utilities rose sharply over the past quarter.

Even so, consumers are not cutting back uniformly.

The report highlights a distinct “premiumisation” trend in travel and hospitality. While overall leisure travel intent has softened after the festive season peak, consumers who are travelling are increasingly opting for full-service airlines, upgraded seats, premium hotels, and curated experiences rather than budget options.

Where are consumers still willing to spend?

Deloitte said consumers are shifting their wallets toward “memory-making moments”, indicating that discretionary spending is being channelled into experiences rather than broad-based consumption.

A similar trend is visible in food consumption. India’s food frugality index rose to 98.3 in March 2026, reflecting more disciplined grocery spending and efficient consumption habits. Around 31% of consumers said they were reducing food waste, while only 11% reported buying less food than they wanted.

Instead of compromising significantly on quality, households appear to be optimising spending through smarter purchasing decisions, including selective adoption of store brands.

Why are EVs bucking the broader slowdown?

Automobiles remain a weak spot in the consumption cycle. Deloitte’s Vehicle Purchase Intent Index declined to 85.2 in March 2026, reflecting softer demand for large purchases amid economic uncertainty. About 43% of respondents said their current vehicle still met their needs, while 12% said they were hesitant to commit to large expenses in the current environment.

Yet EVs continue to emerge as a structural growth segment.

EV purchase intent remained steady at around 60%, driven by interest in technology-led features, lower maintenance costs, and sustainability considerations. Deloitte noted that EV demand is increasingly decoupling from the broader slowdown in vehicle purchase intent.

“Indian consumers are entering a phase of calibrated consumption,” said Anand Ramanathan, partner and consumer industry leader, Deloitte South Asia. “Households are not stepping back from consumption; they are becoming sharper about where value lies, prioritising essentials, upgrading experiences and deferring large commitments.”

The report suggests India’s consumption story is evolving rather than weakening. Sectors linked to premium experiences, hospitality, and EV ecosystems could continue to see demand momentum, while mass discretionary categories may face prolonged pressure as consumers become more value conscious.