The past week in Indian retail and FMCG has underscored the dynamism of the sector, where consumer behaviour, policy shifts and competitive strategies are reshaping growth trajectories. From rural resilience to regional brand power, and from policy support to bold corporate moves, here are the highlights.
Rural India continues to drive momentum in FMCG, with Q2 volumes growing 8.4% compared to 4.6% in urban areas, marking the sixth consecutive quarter of rural outperformance. This growth is aided by smaller packs, e-commerce penetration and agile regional manufacturers. At the same time, industry leaders highlight a structural consumer shift towards regional and newer brands, reflecting rising demand for value and localised preferences.
Workforce trends are also evolving, with leading alcohol and tobacco companies accelerating diversity by significantly increasing the share of women professionals, signalling a generational shift in perceptions around these sectors. Policy developments added further optimism, as Prime Minister Modi’s Independence Day speech promised GST relief and job creation, measures expected to fuel urban FMCG demand.
Regionally, South India is emerging as a frontrunner in online FMCG adoption, with southern metros outpacing others in e-commerce penetration. Meanwhile, Reliance Consumer Products entered the healthy beverage market through a majority stake in Naturedge Beverages.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. Rural India leads FMCG growth in Q2, outpacing urban markets
In Q2 (April–June) 2025, rural India delivered stronger FMCG volume growth at 8.4%, nearly double the 4.6% seen in urban markets, powered by demand for smaller packs, increased e-commerce traction, and rising influence of small manufacturers. This marked the sixth consecutive quarter where rural outpaced urban growth, while overall FMCG value grew 13.9% year‑on‑year, reflecting sustained rural momentum alongside a recovering urban trend.
2. FMCG segment seeing 'consumer shift' towards regional brands: Honasa CEO
The FMCG segment is witnessing a significant 'consumer shift' towards newer and regional brands, as consumers are increasingly seeking value and opting for localized preferences, Honasa Consumer Chairman and CEO & Co-founder Varun Alagh has said.
Indian alcohol and tobacco giants like ITC, United Breweries, and United Spirits are actively increasing the hiring of women professionals. This diversity push is fueled by a younger generation less concerned with social stigmas associated with these industries. Consequently, female representation has significantly increased across these companies, with targets set for further growth in leadership roles.
4. PM's I-Day speech: GST relief, job push may serve up growth for FMCG firms
Prime Minister Modi’s Independence Day speech introduced GST reforms as a Diwali gift, expected to ease tax burdens and lift consumption, especially among the urban middle class, with FMCG companies anticipating a significant uptick in demand.
5. South India pulls clear in online FMCG adoption, says Nielsen report
India’s In the April–June quarter (Q2) of calendar year (CY) 2025, southern metros recorded a higher share of fast-moving consumer goods (FMCG) sales in e-commerce compared to other metros, NielsenIQ (formerly Nielsen) said in its quarterly report. According to the research firm, e-commerce kept its upward pace in the quarter ended June, gaining ground on modern trade in eight metros. Southern metros led with an 18.4 per cent share, compared to 15.8 per cent across the eight metros.
6. Reliance Consumer Products acquires majority stake in Naturedge Beverages
Reliance Consumer Products (RCP), the FMCG arm of Reliance Industries (RIL), has entered the fast-growing healthy functional beverage space with the acquisition of a majority stake in a joint venture (JV) with Naturedge Beverages, the company said in a press release.