India’s retail and FMCG landscape is balancing between headwinds and opportunity. Rural markets are increasingly driving consumption, with affordable premium FMCG products now accounting for over half of rural demand, a reflection of rising aspirations and wider digital access. Yet overall FMCG growth slowed in 2024, with consumer reach points showing only modest expansion.
At Reliance’s AGM, the company announced its consumer products arm will become a direct subsidiary, consolidating brands under a ₹1 lakh crore revenue target. Meanwhile, analysts see retail itself, not just FMCG, as the next big consumption wave, with rising incomes fuelling interest in players like Trent and DMart.
Specialty food ingredients and evolving consumer categories are also reshaping India’s F&B sector, projected to touch $8.3 billion by 2033. On a macro scale, GDP growth hit 7.8% in Q1, while longer-term projections suggest India could emerge as the world’s second-largest economy by 2038 in PPP terms.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. Rural India sees surge in affordable premium FMCG purchases, outpacing urban markets
Rural India is increasingly embracing affordable premium FMCG products, surpassing urban areas in consumption volume with a 51% share. This shift is driven by factors like low-unit packs, rising aspirations fuelled by increased content consumption, and brands offering accessible premium options.
2. FMCG growth loses steam amid headwinds
Consumer reach points (CRPs) of FMCG brands—a measure of consumer activity—grew by a slower 4 per cent to 120 billion in 2024, reflecting both the broader slowdown in consumption and sector-specific trends. CRPs track actual purchases made by consumers and the frequency of these purchases within a calendar year.
India’s largest retailer Reliance Retail announced that its Consumer Products business, RCPL, is set to become a direct subsidiary of Reliance Industries' Limited. The move, unveiled at the company’s 48th Annual General Meeting (AGM), is aimed at consolidating all consumer brands under one focused entity
4. Retail to lead India’s next consumption wave: Milind Karmarkar
Rising per capita incomes are shifting India’s consumption growth from FMCG to retail, offering higher returns. Experts highlight retail stocks like Trent and DMart as long-term opportunities, emphasizing patience, valuation discipline, and gradual accumulation amid cyclical trends and economic shifts.
5. India’s Specialty Food Ingredients Market to Hit $8.3B by 2033
India’s food and beverage (F&B) industry is in the midst of a major transformation, driven by evolving consumer preferences, a strong agricultural base, and rapid advances in food processing and packaging. According to recent market reports, the country’s specialty food ingredients market is projected to reach $ 8.3 billion by 2033, growing at a CAGR of 6.7 percent.
6. Dead economy, anyone? Expansion at 7.8% in first qtr
Smaller India's economy experienced a robust surge, reaching a five-quarter high of 7.8% in April-June, propelled by strong manufacturing and services sectors. However, experts caution that this growth may face challenges due to newly imposed US tariffs on Indian imports of Russian oil.
7. India may emerge as 2nd-largest economy by 2038 in PPP Terms
An EY report projects India's economy to reach $20.7 trillion (PPP) by 2030 and potentially become the second largest by 2038 with a $34.2 trillion GDP. Fuelled by strong domestic demand and technological advancements, India's resilience helps mitigate the impact of US tariffs. The nation is poised to overtake Germany by 2028 in market exchange rate terms.
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