Can easing prices and stronger growth lift FMCG demand this year?

Softening inflation and stronger macro indicators are setting up a better year for FMCG consumption in India, with volume growth expected to improve after a long patch of weak demand. Lower price pressure, tax relief and rising real incomes are starting to support both urban and rural spending on everyday products.

Consumers are finally getting some relief because food and commodity inflation has cooled, and this is freeing up part of the monthly budget for extra purchases in categories like packaged foods, personal care and home care. Research firms see FMCG volume growth in the mid single digits in early 2026 as households make slightly more shopping trips and shift slowly towards premium packs where they see value. At the same time companies are gaining from lower input costs, so they can reduce promotions that hurt margins and still focus on expanding reach and brand spends.

The broader economic setting is also turning more supportive because private consumption is again emerging as the main driver of GDP growth at 8.2% in Q2 FY26, backed by higher disposable incomes, GST rate cuts and a steady repo rate cycle around 5.25%. Rural demand that had slowed is showing signs of recovery, outpacing urban for seven quarters with 5.7% value growth in November, as inflation in essentials eases and welfare schemes and MSP hikes support farm incomes, and this is critical for mass FMCG players. Yet companies will still need to watch risks like any renewed spike in food prices or global shocks, and so they are betting on volume led growth, sharper execution in kirana and modern trade, and steady innovation rather than only taking price hikes.