India’s retail and FMCG sectors are showing encouraging signs of recovery, setting the tone for a resilient 2025–26. According to a report by Shriram Mutual Fund, the FMCG segment is likely to bounce back in the first half of FY26, driven by a resurgence in rural demand, easing inflation, and smarter pricing strategies. This positive sentiment is echoed by FMCG players like Godrej Consumer, which expects momentum to build over the next 12 to 18 months, aided by lower food inflation and a promising monsoon.
Recent NielsenIQ data reveals that rural markets continue to outperform urban counterparts, marking the fifth consecutive quarter of higher rural growth, contributing to an overall 11% rise in FMCG sales in Q4. To navigate geopolitical tensions near border states, companies have also been proactive - adjusting factory shifts and bolstering inventory in areas like Punjab and J&K to maintain uninterrupted supply.
Meanwhile, Tata Consumer is gearing up to accelerate its food and beverage portfolio with both organic growth and strategic acquisitions. More Retail is also making headlines, targeting a ₹2,000 crore IPO by 2026. In parallel, India’s retail sector surged with a staggering 169% year-on-year growth in Q1 2025, largely driven by new store openings in urban hubs.
Hyperlocal fulfilment is emerging as a cornerstone strategy for modern retail. By integrating data and technology, brands are reimagining inventory management to deliver faster and more efficiently, underlining a new era of retail transformation in India.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. FMCG sector set for recovery in H1FY26; Consumer durables show long-term strength: Report
The fast-moving consumer goods (FMCG) sector is expected to see a rebound in demand in the first half of financial year 2025-26, supported by a revival in rural markets, easing inflation, and favourable pricing strategies, according to a recent report by ShriRam Mutual Fund.
2. FMCG firms ensure uninterrupted supply, tweak shifts near border areas
Fast-moving consumer goods (FMCG) companies have reduced shift timings at their manufacturing units, are pushing additional stocks and ensuring that their employees stay safe during the cross-border conflict between India and Pakistan. Some have offered higher credit to their supply chain to make sure that supplies don’t run out, especially in border states like Jammu & Kashmir (J&K), Punjab and Rajasthan.
3. Smaller packs, rural demand drive India’s 11% FMCG growth in Q4: Nielsen Report
Faster rural consumption is driving growth in the FMCG sector in India. A report by NielsenIQ indicated 11 per cent year- on-year growth in Q4 as rural growth outpaced the urban areas for the fifth straight quarter. Though this accounts for just over a third of overall consumer goods sales, it has become a bright spot for the FMCG industry.
4. Godrej Consumer Expects Revival in FMCG Demand in The Next 12-18 Months
FMCG major Godrej Consumer Products Ltd (GCPL) expects a revival in demand in the next 12-18 months, helped by tailwinds as lower food inflation, normal monsoon and pay commission, said its Managing Director and CEO Sudhir Sitapati on Wednesday. GCPL termed the persistent inflation as a "short-term blip", where it has passed on only 15–16 per cent of the palm oil price increase to customers.
5. Tata Consumer to accelerate beverage, food business expansion
Tata Consumer, the fast-moving consumer goods (FMCG) arm of Tata group, will step up its focus on food and beverages by entering new categories organically and making select acquisitions, MD & CEO Sunil D’Souza told FE during an exclusive interaction. The move is timed with a larger FMCG revival in the domestic market, where the need for functional beverages as well as packaged food items is set to grow.
6. More Retail eyes Rs 2,000 crore from IPO
Grocery and food retail chain More is likely to raise Rs 2,000 crore through a primary issue in its proposed public offering, expected between April and Dec 2026.
7. India's retail sector surges with 169 pc growth in Q1 2025: Report
The Indian retail sector witnessed 169 per cent growth (year-on-year) in the January-March quarter, as strong momentum in new retail store openings continued to play out in major metropolitan cities, a report said on Friday. On a quarter-on-quarter (QoQ) basis, gross leasing activity in the retail sector noted an uptrend of 9 per cent, according to the report by JLL India.
8. How hyperlocal fulfilment is redefining inventory strategy for modern retailers
India's Indian retail is witnessing a hyperlocal fulfilment revolution, enabling brands to tackle inventory challenges through speed and proximity. Business leaders emphasize the importance of robust distribution, technology integration, and real-time data to meet rising consumer expectations for immediacy. This shift transforms hyperlocal from a niche strategy to a crucial element for success in India's dynamic market.