GST cut fails to cool prices; traders cite lower arrivals and cost surge in Khari Baoli

New Delhi: A GST reduction to 5% on select dry fruits has not translated into lower prices in Delhi’s Khari Baoli ahead of Diwali. Traders said wholesale and retail quotes for key items are higher than last year, with thinner arrivals, higher import and procurement costs, and a smaller domestic raisins crop offsetting the tax relief.

Shopkeepers reported that arrivals from the United States and Chile have been limited in recent weeks for almonds and walnuts, while the Indian raisins crop is smaller this year. Several retailers estimated their festive volumes at about 25% of last year’s level, citing resistance at current prices and shorter purchase lists from regular buyers.

Price comparisons provided by multiple dealers showed raisins selling around Rs 600 per kg versus roughly Rs 360 during last Diwali. Almonds were quoted near Rs 800 per kg compared with about Rs 640 a year ago. Chile-origin walnut kernels were around Rs 1,800 per kg, up from Rs 1,200–1,400 last year. Cashew prices were broadly stable, depending on grade and origin. Rates continued to vary by grade, pack size and seller.

Retailers said the GST cut helps in principle but the final shelf price reflects the cost of the physical product, which has risen. They cited grade premiums, financing, packing and last-mile logistics as contributors. An importer in Khari Baoli said arrivals were “thin” and procurement costs “firm”, leaving “little room to pass on tax relief” during the peak season. A retailer added that buyers are trading down to smaller packs and lower grades, and some are postponing bulk purchases until after the festival.

On the ground, demand has shifted towards value options. Shops reported more enquiries for 250-gram and 500-gram packs instead of one-kilogram packs. Institutional and corporate orders have been selective and more price-sensitive than last year, according to wholesalers. Several retailers said footfalls were uneven through the week and conversion rates weaker than expected for the festive window.

Traders also flagged local operating issues. They pointed to overflowing sewage in some lanes and said security equipment at one entry point was not functioning during peak hours, adding that these conditions make movement difficult in the rush period. NewsDrum has sought comments from the Municipal Corporation of Delhi and local law-enforcement on drainage and security arrangements; responses were not received by press time.

Market participants expect some easing after the festive peak if fresh consignments arrive and speculative demand cools. However, retailers cautioned that sentiment may take longer to stabilise if finished-goods prices remain high relative to household budgets. One dealer said consumers are “buying for ritual and gifting in smaller quantities, not for stocking”.