Indians cutting down on big-ticket buying: survey

Indians are cutting down on discretionary purchases like clothing, electronics and automobiles as consumer optimism in the country is on a decline, according to an emerging markets consumer survey by financial services company Credit Suisse.

High inflation and slower growth continues to worry consumers in India with more people expecting lower salary increases, said the survey, which interviewed 2,602 respondents across 10 cities and rural areas in India.

This is in sharp contrast with other fast-growing economies like Indonesia, where the increase in minimum wages is likely to keep consumer sentiment robust, and China, where sentiment remains strong on the back of purchases by consumers from lower income groups, the report released on Wednesday said.

"There are signs of down trading in discretionary items in India. Fewer people are buying smartphones and more now want to buy an entry-level car," said Arnab Mitra, research analyst with Credit Suisse.

"More and more consumers are postponing big-ticket purchases. This situation will take more than a couple of quarters to improve," he said.

The report, however, said the long-term growth potential in India remains intact due to low product penetration in most categories.