India’s leading fast-moving consumer goods (FMCG) companies are pinning high hopes on Budget 2026 to revive consumer demand, with industry leaders urging the government to introduce deeper income tax cuts and supportive policy measures to boost middle-class purchasing power amid a changing GST framework.
With consumption remaining uneven across urban and rural markets, top executives from consumer-facing companies say the upcoming Budget could play a critical role in strengthening disposable incomes and easing cost pressures faced by manufacturers grappling with volatile commodity prices and currency fluctuations.
“The Budget can support recovery in consumption by strengthening purchasing power, particularly in price-sensitive urban and rural markets. At the same time, initiatives to improve the agri and farm sector will help ensure steady input prices, enabling FMCG companies to manage costs without passing them on to consumers,” said Mayank Shah, Vice-President, Parle Products, as quoted by TOI.
Industry leaders are also seeking stability on the cost side, including predictable import duties on essential raw materials and greater support for domestic manufacturing. Kamal Nandi, Business Head and EVP, Appliances, Godrej Enterprises Group, said a sharper focus on boosting disposable incomes is critical, especially for first-time middle-class buyers who have been impacted by higher commodity prices and currency depreciation.
“Measures that ease cost pressures—such as stable import duties and support for domestic manufacturing—will help companies absorb inflation instead of transferring the full burden to consumers,” Nandi said.
Several FMCG executives have also flagged the need for GST rationalisation. Sudhir Sitapati, Managing Director and CEO, Godrej Consumer Products, said some mass-consumption categories, particularly in home care, continue to attract 18 per cent GST and could be shifted to a lower slab to aid demand.
Managing input-cost volatility remains another key concern for the sector, especially in categories affected by inverted duty structures under GST, which lock up working capital. “Budget 2026 should address tariff rationalisation and support faster infrastructure investments to sustain broad-based growth,” said Prashant Peres, GM, India, Mars Snacking, while Sudhanshu Vats, Managing Director, Pidilite Industries, echoed the need for policy measures to cushion manufacturers against global commodity swings.
The government has proposed a ‘next-generation GST’ regime that envisages a simplified two-rate structure of 5 per cent and 18 per cent for merit and standard goods, along with a 40 per cent levy on select demerit goods such as pan masala and tobacco. Industry leaders say the transition must be managed carefully to avoid fresh disruptions.
Despite lingering challenges, FMCG companies are beginning to see early signs of recovery. Dabur said demand improved during the quarter following GST revisions, with consumer sentiment strengthening across both urban and rural markets. Data from retail intelligence platform Bizom showed neighbourhood store orders rising 6.9 per cent in the December quarter, more than double the growth recorded a year earlier, driven by stronger retail stocking and seasonal demand.
Marico has also reported high single-digit year-on-year volume growth for the December quarter and remains optimistic about a gradual recovery in consumption, supported by easing inflation, lower GST rates, higher minimum support prices and a healthy crop-sowing season.
After more than ten quarters of muted growth, FMCG leaders believe Budget 2026 could be a turning point—provided policy measures translate into higher disposable incomes, cost stability and a sustained revival in consumer spending.