Despite global uncertainty, the Iran war that started on February 28, and rising inflation in April-May, Indian consumers are shopping heavily. There has been no decrease in demand from everyday essential items to beauty and personal care products. Top executives of leading FMCG companies say that despite disruptions in the supply chain, domestic consumption remains strong. However, market experts have advised to exercise some caution for the coming two to three quarters, because the pressure of rising raw material prices may show its impact in the future.
In the quarter ending March 2026, the results of big companies like Hindustan Unilever (HUL), ITC, Nestle, Marico and Godrej Consumer Products have been mixed. Last year, the reduction in GST rates and increasing demand for premium products have given a lot of relief to the companies. Nestle India Chairman Manish Tiwari clearly says that geopolitical tensions in West Asia and rising commodity prices are beyond the control of the industry, but demand from high-income consumers is still quite strong. Similarly, according to Falguni Nair, MD of Nykaa's parent company FSN E-Commerce Ventures, their products fall in the category of 'small luxury', whose consumption does not reduce easily even in difficult times.
Talking about food items, tremendous growth is being seen in the market. Meenesh Shah, Chairman of Mother Dairy and National Dairy Development Board (NDDB), confirmed this trend and said that there has been no significant decline in the consumption pattern. India is currently at a stage where products like cheese, curd or ice cream are seeing a growth of more than 25 percent. He believes that if inflationary pressure persists for a long time, it is likely to affect only select income group people.
Energy supply has been affected due to the Iran war, due to which the cost of packaging, transport and raw materials has increased significantly. This has had a direct impact on the companies making packed food. To deal with this increasing cost, most companies have either increased the prices of products by 3 to 8 percent or have reduced the weight (grammage) of the packet at the same price. Zydus Wellness CEO Tarun Arora says that the fundamentals of India's consumption story are strong. If the tension continues for the next few quarters, cost inflation will be a major concern. At present, companies are trying to balance prices by improving their supply chain. Saugata Gupta, MD of Saffola oil manufacturing company Marico, also believes that right now the situation is a 'wait and watch' one, but there are enough reasons to remain positive.
According to a report by rating agency Crisil, the revenue of India's organized FMCG sector may grow at the rate of 8-10 percent in this financial year, which was 8 percent in the last financial year. This revenue growth will be seen due to the increase in prices. However, due to the rise in crude oil prices, there will definitely be pressure on the profits of companies. Falguni Nair has also warned that fluctuations in foreign exchange rates and oil prices are indicating to be cautious for the next year. Poor monsoon, weak domestic consumption and prolonged high oil prices remain the main risks for the entire sector.
