Salon packages for the current festive season have doubled in price due to rising raw material costs and the removal of input tax credits. Despite premium services now costing over ₹5,000, demand remains strong. Industry operators are passing these expenses to consumers to protect profit margins against higher costs for palm oil and specialty chemicals.
Beauty salons and mobile beauty service providers have significantly raised their prices during this festive season. Customers seeking makeovers for Navratri and Durga Puja are now paying double the rates compared to the previous year. This sharp increase is being driven by a combination of higher raw material prices and structural changes in how taxes are handled for these services.
The cost of running a salon has increased noticeably over the past year. Essential ingredients used in cosmetics, such as palm oil and specialty chemicals, have seen price hikes of 25% to 30%. Industry operators report that supply chain disruptions, linked to conflicts in West Asia, have made it harder and more expensive to import the crude-linked derivatives needed for beauty products. These rising input costs are forcing businesses to adjust their service fees to keep their operations running smoothly.
Financial pressure is also stemming from tax policy changes. While the Goods and Services Tax (GST) slab for beauty services was lowered to 5%, the removal of input tax credits has created a new challenge. Under this system, businesses can no longer claim refunds on the taxes paid for the equipment and raw materials they purchase. Because they cannot offset these costs against their tax liability, many service providers have seen their profit margins come under pressure. To maintain their bottom line, these providers are passing the added financial burden directly to the consumer.
Despite the price jump, consumer demand has not slowed down. High-end beauty packages, particularly on digital platforms, are now frequently priced above ₹5,000. Data suggests that consumers continue to prioritize luxury and premium grooming experiences, indicating that the desire for these services is currently outpacing the sensitivity to higher prices.
For investors and market observers, the key monitorable remains whether this strong consumer demand will continue if price hikes persist beyond the festive period. The Indian beauty and wellness market is expected to grow significantly over the coming years, but the ability of service providers to manage costs while maintaining this demand will determine the sustainability of their profit margins. As companies look to diversify their revenue through private-label products and e-commerce channels, the challenge will be to balance volume growth with the rising cost of operations.