India’s FMCG and retail sector enters the new fiscal year with cautious optimism, as Budget FY27 reinforces a long-term consumption story rooted in rural and semi-urban growth.Industry leaders have welcomed the government’s continued push on infrastructure, MSME support, and Tier II and III city development, arguing that these measures will strengthen disposable incomes and unlock sustained demand beyond metropolitan markets. The planned nationwide rollout of SHE Marts is also seen as a structural move to formalise rural entrepreneurship and widen organised retail participation.
At the corporate level, the competitive landscape continues to shift. Hindustan Unilever’s leadership reshuffle reflects mounting pressure from agile D2C challengers,while large FMCG firms are preparing for a volume-led recovery after GST disruptions. Advertising intensity remains high, with FMCG still accounting for nearly a third of India’s ad spends, underscoring the fight for consumer mindshare. Together, these signals point to a sector stabilising operationallywhile recalibrating for its next phase of growth.
Click on the headingsbelow for insights on how these trends are shaping India’s retail landscape…
1. Budget FY27: FMCG industry says focus on MSMEs, infra, rural demand to drive growth
Top executives said the budget reflects continuity and resilience, while avoiding short-term populism. They noted that measures such as MAT credit relief, higher public capex, focus on Tier II and III cities, and support for traditional medicine and AYUSH will create sustained demand tailwinds across rural and semi-urban markets.
2. HUL rejigs top deck as D2C players chip away at FMCG strongholds
Hindustan Unilever's (HUL) recent leadership rejig, particularly across its Beauty and Personal Care and Foods& Refreshments businesses, clearly signalled that Chief Executive Officer Priya Nair has recognised the scale of disruption reshaping India's FMCG market, as nimble D2C companies steadily chipping away at the legacy brand' smarket share.
3. FMCG firms seen posting mid-to-double digit Q3 growth as volumes recover
FMCG companies anticipate mid-single to low-double-digit revenue growth in the December quarter, fuelled by volume increases, easing GST disruptions, and stable pricing. Resilient rural demand and portfolio premiumization are keydrivers, with ITC and HUL expected to show healthy improvements. Nestle Indiais poised for double-digit revenue growth as post-GST normalization continues.
4. FMCG Accounts For 30% Of Ad Spends; Ecommerce Expands 40%: Dentsu-E4m Report
Fast-moving consumer goods (FMCG) continued to dominate India’s advertising ecosystem in 2025, accounting for 30 per cent of total ad spends, according to the dentsu-e4m Digital Advertising Report 2026. The sector invested Rs 36,084 crore, retaining its position as the largest advertising category, driven by intense competition and sustained spends from high-frequency consumption segments such as food staples and personal care.
5. India’sUnion Budget 2026 plans nationwide rollout of SHE Marts
Presenting the budget, Indian Finance Minister Nirmala Sitharaman said the planned Self-Help Entrepreneur (SHE) Marts would be located within cluster-level federations. It will serve as structured sales channels for products made by women-led Self-Help Groups (SHGs) in rural and semi-urban areas.
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