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Diwali’s Impact on India’s Manufacturing and Supply Chain

by | Nov 7, 2023 | Blog Post

Explore Diwali’s Impact on India’s manufacturing and supply chain.

Businesses are often at their busiest before major holidays. The upcoming Diwali festival, one of the most important holidays in India, is no exception. In order to understand the supply chain situation, let’s explore Diwali’s Impact on India’s manufacturing and supply chain.

What is Diwali?

Diwali, also known as Deepavali, is a Hindu festival of lights that celebrates the triumph of good over evil. It is one of the most important holidays in India and for Hindus around the world. Diwali is often compared to the Chinese New Year and Thanksgiving, as it is a time for families and friends to come together and celebrate.

Upcoming Diwali Celebration Dates
2023 November 10 – 15
2024 October 29 – November 3
2025 October 18 – 23

How does Diwali impact on manufacturing and supply chain?

Diwali is one of the most important holidays in the Indian economy, boosting consumer spending on new clothes, gifts, home decorations, food, and beverages. As the most celebrated holiday in the community, Diwali also leads to increased consumer spending in preparation for the festivities. However, businesses typically close for several days during the holiday, resulting in manufacturing delays and inventory shortages, which significantly impact the Indian supply chain.

  • Production shutdowns: Many businesses in India shut down for several days during Diwali, leading to manufacturing delays and shortages of inventory. Businesses may also rush to produce goods before the holiday, which can lead to quality issues.
  • Labor shortages: Workers in India often take time off during Diwali to celebrate with their families, leading to labour shortages in manufacturing and other industries. This can also delay manufacturing and reduce capacity.
  • Skeletal Workforce in Logistics Operations – Staffing shortages at customs, airports, seaports, and trucking companies during Diwali can slow down the processing of goods and deliveries.
  • Congestion and delays: There is increased demand for transportation services before Diwali, as businesses try to meet shipment deadlines. This can lead to congestion and delays at ports and terminals. The port terminals will also be understaffed due to the celebration.
  • Shipping Line – As manufacturing slows down, shipping lines may increase blank sailings during the period to balance the supply and demand. This can cause delays and disruption of shipping schedules.
  • Higher Freight Costs: The high demand and low capacity during Diwali drive up freight costs.


How to Mitigate the Impact of Diwali on the Supply Chain

Here are some of the ways you can mitigate the impact of Diwali on your supply chain:

  • Plan ahead on Production: Forecast demand for your products and services during Diwali and adjust your production plans accordingly. Consider increasing inventory levels or stockpiling goods in advance.
  • Diversify your supply chain: Source from multiple suppliers and reduce reliance on any one supplier. This will minimize the impact of disruptions at any one supplier.
  • Communicate potential delays: Communicate with your suppliers and customers about potential delays during the Diwali holiday period. This will manage expectations and avoid disruptions to business operations.
  • Plan ahead on logistics: Book your shipments weeks ahead of Diwali to save on costs and ensure that you have the space you need to ship your goods. Consider working with a trusted freight forwarder to help you plan your logistics.

The key to mitigating the impact of Diwali on the supply chain is to plan ahead and communicate effectively with your suppliers and customers. It is also important to have a trusted logistics partner to help you in overcoming this Diwali season. Dimerco India is experienced in handling supply chain challenges during any peak season challenges. Reach out today to start a discussion.

Learn more about the ins and outs of manufacturing in India from our eBook.