The Consumer Packaged Goods sector (called Fast-Moving Consumer Goods or FMCG in India) and broader retail sector in India reported further acceleration in the last quarter of 2025.
Key Drivers of Growth
The industry recovery is attributed to a confluence of factors settling after the initial disruption of GST reforms.
Rural Market : Similar to previous quarters, rural demand grew faster than overall demand, albeit from a smaller base. Factors contributing to this include healthy crop sowing seasons, hikes in Minimum Support Price (MSP), and improved affordability due to lower GST rates.
Operating Margin Improvement: Softening raw material prices and increased volumes allowed companies reduce some prices and to improve their operating margins
Channel Shifts: Organized trade maintained strong momentum, while e-commerce and hyper-local delivery platforms registered strong double-digit growth.
The sector is projected to achieve greater 5% increase in volume during the first few months of this year alone. According to a report by Worldpanel, the industry is experiencing a strong upswing driven by robust macroeconomic indicators. Worldpanel’s December Pulse report noted that upward revisions in India’s GDP growth expectations, combined with low overall inflation and deflation in food prices, have allowed many manufacturers to pass cost savings on to shoppers.
The report further highlighted that the Reserve Bank of India’s (RBI) Consumer Confidence Index indicates a return in consumer sentiment.
Overall, the CPG sector is optimistic about a sustained recovery. With trade disruptions being negotiated and inflationary pressures cooling, firms are focused on a volume-led trajectory and enhanced profitability through the remainder of the fiscal year
Last updated: February 11th, 2026
