After a prolonged period of slow growth, India's fast-moving consumer goods (FMCG) sector is finally witnessing a tangible recovery in demand. This positive shift is being driven by a combination of factors, most notably the reduction in Goods and Services Tax (GST) on a range of household essentials, which has effectively put more money back into consumers' pockets.
Signs of Revival on the Ground
Major consumer goods companies have reported initial signs of a pickup in their recent quarterly business updates. They are optimistic that a mix of benign inflation and the recent GST rate reductions will boost consumption of everyday items like soaps, shampoos, and packaged food in the coming months. The new GST regime, which came into effect on September 22 last year, aligned with the start of the festive season, a period traditionally marked by higher consumer spending.
Dabur India, in its third-quarter forecast released this week, highlighted this improving sentiment. "In the month of October 2025, distributors and retailers focused on liquidating existing higher-priced inventory in the channel. Post trade stabilisation, consumer sentiment improved in urban and rural areas," the company stated. Dabur, known for brands like Real juices and Hajmola, estimates its consolidated revenue will grow in mid-single digits, with profit after tax growing ahead of revenue.
Data Confirms Growth Momentum
Supporting these corporate observations, data from Worldpanel by Numerator (formerly Kantar Worldpanel) shows a significant uptick. After nearly 18 months of tepid growth, FMCG volumes grew by a robust 5.3% in the August-October 2025 period. This marks the sector's best performance since the period ending in April 2024, even though year-on-year growth (Oct 2024-Oct 2025) still lags. It is important to note that the study was compiled using the most recent data available at the time, which was October, meaning the quarters captured are not in the typical financial year calendar format.
K Ramakrishnan, Managing Director, South Asia at Worldpanel by Numerator, confirmed that the positive momentum continued well into November and is expected to hold in the coming months. He noted that while the festive season and GST cuts provided an immediate boost, the broader impact of the tax changes should be more clearly reflected from January 2026 onwards.
Outlook: A Leap Towards Sustained Growth
Analysts at the firm believe a 5% volume growth is "possible" within the first few months of 2026. They also predict a significant shift in the market dynamics. "With the gap between branded and unbranded products reducing post-GST, we should also start seeing branded products equal or beat the pace at which unbranded is growing," they explained. The analysts concluded optimistically: "With macro tailwinds aligning and consumer confidence rebounding, India's FMCG sector is not just poised for recovery—it is gearing up for a decisive leap into sustained, value-driven growth."
Echoing this sentiment, Godrej Consumer Products reported that demand conditions in India strengthened 'progressively' during the December quarter. The company has projected its standalone business to deliver double-digit revenue growth in the third quarter, further cementing the narrative of a sectoral rebound.
