Bengaluru, Aug. 11 -- As India nears its peak festive season, a price dilemma is simmering in the country's mithai kitchens. Squeezed by costlier milk, ghee and butter, confectioners from Kolkata's Sweet Bengal to Bengaluru's Lal Sweets and national giant Bikaji are taking divergent paths to survive.

While some are nudging up prices on favourite mithai categories, others are fully absorbing cost inflation, betting that high-volume festive sales will rescue their margins. The festive season is critical for India's sweet makers, accounting for about 35% of annual sales for organized players, according to industry estimates.

Vadodara-based Jagdish Farshan plans to raise prices by about 10% this Diwali, with ghee-rich and nut-based favourit...