The season, which began with the end of the Muslim holy month of Ramadan on August 31, and ends with the Hindu festival of lights, Diwali, in late October, is seen as a lucky time for big purchases from cars and property to gold.
But analysts warn that expenditures could be curtailed this year as the country's economy slows under the brunt of nearly a dozen interest rate hikes in 18 months, aimed at taming nine percent-plus inflation.
"High-value purchases and where borrowed money is involved could slow down," Siddhartha Sanyal, chief India economist with Barclays Capital, told AFP.
Hemen Kapadia, a Mumbai-based stockbroker, has his heart set on buying the latest Ford Fiesta, which costs nearly one million rupees ($22,000) for a diesel version.
But he said he has postponed the purchase because of India's weakening economic situation, which has sent the Bombay Stock Exchange's benchmark share index down by more than 20 percent and hit his earnings.
India posted its slowest economic growth in six quarters last week, with output up 7.7 percent year-on-year, as expansion was hit by the longest stretch of monetary tightening in a decade.
"I won't buy the car for another year. It's too costly," Kapadia said.
Indian car sales are viewed as a barometer of the national's overall economic health. Car sales slumped 16 percent year-on-year to 133,747 units in July -- their biggest drop in nearly three years -- as high interest rates and rising fuel prices kept buyers out of showrooms.
"The next wave of buying will come only when incomes rise or consumers find a good deal," said auto analyst Mahantesh Sabarad of Fortune Equity Brokers in Mumbai.
Ajit Joshi, chief executive of Tata Group's Infiniti Retail, which runs the electronics megastore Croma, described the current market as "challenging".
He warned that discounts alone, normally offered during the festival period, would not necessarily boost sales.
But there was one bright prospect in gold, another festive favourite whose purchasing season extends to India's peak wedding period in late December.
"Demand is likely to be fairly good this season," said Rajesh Mehta, chairman of Bangalore-based Rajesh Exports, India's largest jewellery maker and exporter by volume.
"But it would have been much higher if prices were lower," he added.
Last month, gold peaked at $1,913.50 per ounce as global equity markets slumped and investors were spooked by the US sovereign debt downgrade, adding to existing nervousness about Eurozone debt.
Mehta predicted that Indians -- the country is the world's largest consumer and importer of gold -- would follow wider trends to buy jewellery as an investment and safe haven in troubled times.