India’s FMCG and retail sector navigated a mixed September quarter - short-term disruptions, but long-term optimism. The transition to new GST rates slowed FMCG sales, with volume growth dipping to 5.4% from 6% in the previous quarter, led by weaker demand in home and personal care. Yet, rural markets remained the bright spot, driving 12.9% value growth and outpacing urban consumption.
Retail inflation fell to a record low of 0.25% in October, well below RBI’s target, giving consumers more spending power. Meanwhile, India’s retail market is projected to hit $1 trillion by 2030, powered by digital adoption and a growing aspirational middle class. On the innovation front, Reliance Retail added German cosmetics brand essence to its portfolio, while homegrown durable brands continued to strengthen their presence in tier-II and tier-III cities. Together, these shifts underscore a retail ecosystem balancing reform-driven turbulence with steady, tech-enabled growth.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. GST disruption slows FMCG sales in September quarter
The sales of consumer goods like soaps, shampoos and washing detergents slowed in the Sept quarter in anticipation of the GST cuts, impacting FMCG volume growth sequentially. Volumes grew by 5.4% compared to 6% in the June quarter with the decline being led by the home and personal care categories, data released by NielsenIQ showed.
2. Rural demand lifts FMCG sector to 12.9% growth in September quarter
The FMCG industry recorded 12.9 per cent year-on-year value growth in the September quarter, with rural markets continuing to outpace urban consumption, according to NielsenIQ estimates. The industry posted a 5.4 per cent rise in volume and a 7.1 per cent increase in prices in Q2 CY 2025. At the same time, the e-commerce channel continued to gain share in metros.
3. Retail inflation plunges to record low of 0.25% in October
The current print is sharply lower than the RBI’s inflation projection of 1.8% for the October-December quarter. This means that unless inflation rises sharply in the next two months, it may end the third quarter undershooting the central bank’s forecast.
India’s consumption landscape is gearing up for a major shift over the coming decade, with the country’s retail market expected to reach $1 trillion by 2030. A new report by venture capital firm Fireside Ventures says this surge will be fuelled by rising disposable incomes, faster digital adoption and the growth of a large aspirational consumer class.
5. Reliance Retail brings German beauty brand ‘essence’ to India
Reliance Retail on Monday said it has signed an exclusive distribution partnership with Germany-based Cosnova Beauty to launch the ‘essence’ brand of cosmetics in India. With this move, Reliance Retail will expand its beauty portfolio. Under the deal, Reliance Retail will distribute ‘essence’ across its omnichannel network including online platforms, standalone beauty stores and partner retail formats to make the brand widely accessible to consumers across the country.
6. How Homegrown Durable Brands Are Powering India’s Next Wave of Retail Growth
Home-grown durable goods brands in India are stepping up by leveraging strong local consumer insights, faster supply chains, tier-II/III market expansion and omnichannel presence. These companies are increasingly capturing value as Indians trade up, demand trusted Indian names and opt for brands built for their context rather than imported ones.
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