Despite recent GST reforms, India's consumer goods industry leaders are urging the government for deeper tax cuts and broader measures to boost middle-class purchasing power in Budget 2026. As per The Times of India, Mayank Shah, vice-president at Parle Products, emphasized that "The Budget can support recovery in consumption by strengthening purchasing power, particularly in price-sensitive urban and rural markets." Industry executives are also seeking policy support to manage volatile commodity prices and provide stability amid global uncertainty. Sudhir Sitapati, MD & CEO at Godrej Consumer Products, noted that several large, mass-consumption FMCG categories in home care continue to be taxed at 18% and could move to a lower slab of 5% to aid demand.
Fast-moving consumer goods companies are beginning to see early signs of recovery following the GST revisions. Dabur reported in an investor update that demand improved during the quarter, supported by GST revisions. The company noted that "In October 2025, distributors and retailers prioritised clearing higher-priced inventory in the channel. Once trade stabilised, consumer sentiment improved across both urban and rural markets, with rural demand continuing to outpace urban demand." Retail stocking has also picked up significantly, with orders at neighbourhood stores rising 6.9% in the December quarter, more than double the 3.1% growth recorded a year earlier, according to Bizom, which tracks eight million kirana outlets across the country. Harshit Bora, analytics head at Bizom, stated that "Strong retail stocking of winter products also supported sales, particularly in personal care, despite broader GST-led disruption."
The uptick in FMCG demand comes after more than 10 quarters of subdued sales growth, largely due to weak income growth and a shift in discretionary spending towards travel and leisure. Marico reported high single-digit year-on-year volume growth in the December quarter and expressed optimism about gradual improvement in consumption in coming quarters, driven by easing inflation, lower GST rates, higher minimum support prices and a healthy crop-sowing season. The Centre has proposed a 'next-gen GST' structure with two rates of 5% and 18% based on classification of items as 'merit' and 'standard', while a 40% tax will be levied on 5-7 select goods including demerit goods like pan masala and tobacco.
FMCG leaders are emphasizing the need for government support to manage input-cost volatility and manufacturing pressures. Kamal Nandi, Business Head and EVP, Appliances, Godrej Enterprises Group, highlighted the need for "a stronger focus on boosting disposable incomes and supporting first-time middle-class buyers of consumer durables—a segment that has been weighed down by higher commodity costs and currency depreciation." He added that measures helping ease cost pressures, such as stable import duties on essential raw materials and support for domestic manufacturing, would allow companies to avoid passing the full benefit of cost inflation to consumers. Prashant Peres, GM, India at Mars Snacking, noted that the industry seeks meaningful support to manage input-cost volatility, particularly in categories impacted by inverted duty structures under GST which lock up working capital.
Industry executives are calling for comprehensive support to the agricultural sector to ensure steady input prices and overall cost management. As per TOI, Parle Products' Shah emphasized the need to "allocate budget and take initiatives to improve agri/farm sector to ensure steady input prices which can help FMCG companies manage costs without passing them on to consumers." Sudhanshu Vats, MD, Pidilite Industries, told TOI that "Budget 2026 should focus on tariff rationalisation and accelerated infrastructure investments to strengthen the momentum on broad based growth." The industry's focus on agricultural support aligns with the broader strategy to maintain price stability while supporting rural demand, which has been outpacing urban demand in recent quarters.
