India’s FMCG sector is seeing demand stabilise after the GST reset, though the recovery remains uneven across categories and regions. Consumption continued to grow through November and December, but the nature of growth has shifted following changes under GST 2.0, industry data shows.

According to market trackers, GST-led price cuts helped clear older inventory across the supply chain, allowing distributors and retailers to restock essential products. As a result, this has brought back consumption-led growth. It has replaced the earlier phase in which higher prices and stockpiling behaviour largely drove value growth.

Industry executives said growth in the October–December quarter was mainly volume-driven. This is because year-over-year value growth moderated due to price corrections. Additionally, analysts noted that while GST benefits have been passed on to consumers, demand response has so far been limited. Discretionary spending is expected to recover gradually.

Channel data also points to intense competition among quick commerce, e-commerce, and modern trade. This has led to pricing disruptions that began normalising in January. Moreover, select packaged products have supported urban demand. Meanwhile, rural consumption has been driven by essentials, aided by better farm output and lower inflation.

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