Consumption in India’s fast-moving consumer goods (FMCG) sector has continued to grow through November and December, but the nature of growth has changed after the rollout of goods and services tax (GST) 2.0, according to industry data shared by market trackers.
An industry expert, said the tax changes led to a clearing of old inventory across the supply chain, giving distributors and retailers room to restock basic products. “Consumption-led growth has come back,” he said, explaining that earlier growth was driven more by higher prices and stocking behaviour.
He added that the October–December quarter showed lower year-on-year value growth compared with previous quarters, but this was largely due to price cuts following GST changes. “This quarter’s growth was primarily volume driven,” he said.
Another industry expert said the benefits of GST cuts have been passed on to consumers, but the response in terms of higher demand has been limited so far. “We are not seeing the price elasticity play out in the short term,” he said. He added that the industry expects some recovery in discretionary consumption over 2026 as households adjust to lower prices.
Channel data also points to rising competition between quick commerce platforms, e-commerce companies, and modern trade stores. Gor said recent months saw disruptions in pricing, with multiple pack sizes and price points for the same products, though this has started to normalise in January.
He also noted that private labels and direct-to-consumer brands are gaining share on online platforms, which could be affecting reported volumes of listed FMCG companies, even if overall consumption remains stable.
Category-wise, urban demand has been supported by higher spending on select packaged and indulgence products, while rural growth has been driven more by essentials such as food staples and milk-based products, helped by better farm output and lower inflation.
