The FMCG Industry in India: Trends, Statistics, and Insights

The Fast-Moving Consumer Goods (FMCG) industry in India is a major force that drives daily life in both urban and rural areas of the world’s most populous country.

This industry is accelerating toward a trillion-dollar future due to growing demand in rural areas and the fast growth of e-commerce.

Overview of the FMCG Industry in India

Understanding FMCG: Definition and Scope

FMCG includes everyday necessities like food, drinks, personal care products, household goods, and over-the-counter medical supplies. They are defined as things that are sold fast and at a relatively low cost.

FMCG Sector in India

The FMCG industry is a vital component of the Indian economy, employing about 3 million people and contributing around 3% or approximately US$125 billion to India’s Gross Domestic Product (GDP). It is also the fourth-largest industry in terms of GDP, according to the India Brand Equity Foundation and India Macro Indicators.

India has the potential to attract ambitious and convenience-driven consumers due to its young population (median age of 28.4 years) and growing middle class, which currently represents over a third of its 1.46 billion-population, with forecasts indicating this could rise to 60% (or a billion people) by 2047, based on data from Business World.

As the demand for Indian goods grows internationally, this vibrant industry boosts not only local consumption but also exports, especially in the food processing and personal care sectors.

Key Segments of India’s FMCG Market

The Indian FMCG market is segmented into three primary segments:

• Household and personal care (accounting for about 50% of the market share)

• Food and beverages (31%)

• Healthcare (19%)

1. The Household and personal care products category (with a 10-year revenue Compound Annual Growth Rate (CAGR) of 7%), includes items such as soaps, detergents, and cosmetics, and is driven by premiumization and “green” goods.

2. The Food and beverages category (10-year revenue CAGR of 11%) includes staples, snacks, and beverages, and is continuously leaning toward healthier, organic options.

3. The Healthcare category (10-year revenue CAGR of 12%) focuses on nutraceuticals (goods that come from food sources that offer both nutritional and medicinal benefits) and Ayurvedic goods (dietary supplements, which are not regulated as medicine).

Current Market Landscape and Growth Forecast

Market Size, Projected Growth Rates, and Influencing Factors

In 2024, the Indian FMCG industry produced revenue of 21 trillion rupees (US$245 billion) and is projected to expand at a CAGR of 27.9% from 2021 to 2027, ultimately approaching US$616 billion, according to the India Brand Equity Foundation.

Geographical Market Distribution in India

Geographically, urban markets contribute around 62% of FMCG revenues, while rural areas account for over 38%.

• Rural India's market share: for the sixth consecutive quarter, in Q2 2025, people living in rural India bought more products than people in cities, with a volume growth of 8.4% compared to 4.6% in urban areas. However, as urban areas recover, the gap is closing..

• Although metropolitan areas experience consumption reductions as a result of channel shifts, smaller towns and tier-2/3 cities fuel urban recovery.

• Southern metros have the highest e-commerce penetration (18.4%). By comparison, the eight metropolitan cities registered a penetration of 15.8% in Q2 2025. This includes Delhi, Kolkata, Mumbai, Chennai, Bengaluru, Hyderabad, Ahmedabad, and Lucknow.

Drivers of Growth in the FMCG Industry

According to NielsenIQ, a leading consumer intelligence company, in Q2 2025, India’s FMCG industry achieved a 13.9% value growth compared to the same period in 2024.

Here are some of the drivers of this growth (a detailed analysis follows later in the article):

1. Government initiatives and policy support

2. Rising income levels and changing living standards

3. Impact of urbanization on consumer behavior

4. Growth of e-commerce.

It is estimated the Indian e-commerce market will increase from US$125 billion (2024) to US$345 billion in 2030 and to reach US$550 billion by 2035.

Other growth factors include:

• Shift toward premium goods in urban areas

• Affordable alternatives in rural markets

• Growing competition from small producers and direct-to-consumer brands

• Growth of the food processing sub-sector.

This sub-sector – a significant FMCG driver – hit US$307.2 billion in 2022 and is predicted to grow to US$470 billion by 2028, at a 9.5% CAGR.

1. Government Initiatives

According to the India Brand Equity Foundation, the Indian government has launched a number of initiatives aimed at assisting the development of the FMCG industry, improving competitiveness, and assisting exports. Some of these initiatives are as follows:

1.1 Food Processing Incentives

1. The Union Government authorized a Production-Linked Incentive (PLI) scheme for the food processing sector with a budget of Rs.10,900 crore (US$1.46 billion). By June 2025, it had:

• Attracted 90.32 billion rupees (US$1.04 billion) in investments

• Created 340,000 jobs

• Added 3,500,000 metric tons of annual capacity.

2. Additionally, by covering up to 50% of foreign marketing expenses, the initiative assists Indian food companies in expanding internationally.

1.2 Tax Benefits

1. Under the income tax rules, the government introduced a special tax break for new companies that focus on packaging and preserving fruits and vegetables.

• For the first five years: These firms can deduct 100% of their profits from their taxable income (Basically, they pay no tax on profits during this time)

• For the next five years, they can deduct 25% of their profits (which means they only pay tax on the remaining 75%). The corporate profit tax in India ranges from 25% to 35% for local companies.

2. The government has removed taxes on dairy machinery, and for meat, poultry, and fish, it has reduced them from 16% to 8%.

1.3 Support for Start-ups

The government is allocating around US$120.7 million for the SETU program, implemented by the NITI Aayog (India's main policy think tank).

This money will be used to enhance skill training and establish incubation centers which will assist new startups.

2. Rising Income Levels and Changing Living Standards

India's per capita disposable income in 2023-24 was 214,000 rupees (US$ 2,437), and showed a constant year-on-year growth rate of 8% in FY2024, according to India Times.

3. Impact of Urbanization on Consumer Behavior

India's urban population is anticipated to reach 40% by 2030 (up to 624 million people), according to the Ministry of Statistics and Programme Implementation (MoSPI). This trend is expected to continue to shift consumer preferences toward convenience and premium goods.

Urban customers focus on fast commerce for daily needs, fueling e-commerce growth, while aiming for healthier and green products.

4. The Role of E-commerce in Market Expansion

Experts estimated that by 2030, about 40% of all fast-moving consumer goods in India will be bought online.

In big cities, Q-commerce (or quick commerce, an e-commerce model based on ultra-fast, on-demand delivery, with orders typically completed in 10 to 30 minutes) is becoming particularly popular.

This chart shows how different product categories are moving to Q-commerce for impulse buying, based on a survey of consumers by Kearney, one of the leading management consulting companies.

• Horizontal axis (left to right) shows how many consumers are shifting their purchases from normal stores to Q-commerce

• Vertical axis (top to bottom) shows how much Q-commerce generates new, additional purchases (not simply replacing existing ones).

For instance, snacks and drinks lead in quick, impulsive Q-commerce buys, while essentials such as staples lag behind.

Challenges Facing the FMCG Sector in India

According to the "India FMCG Outlook 2025" report from BeatRoute, with data compiled from a survey of more than 100 industry-leading FMCG specialists across the nation, the industry’s challenges are divided into two main categories.

1. Uncontrollable factors: external pressures such as economic conditions

2. Controllable factors: internal issues that can be addressed through strategies and technology.

Uncontrollable

Challenge	Key Details from the Report
Rising raw material costs	Prices are soaring due to global supply chain disruptions and higher demand for commodities such as packaging, essentials, and energy, forcing firms to cover or pass on costs to customers.
Economic uncertainty	The environment is volatile due to fluctuations in GDP growth, changing tax policies, and uncertain consumer spending.

Controllable

Challenge	Key Details from the Report
Strong competition	Large brands are competing with specialized players who use technologies such as Q-commerce and e-commerce.
Poor stakeholder relationships (disputes with distributors and retailers)	The rise of new models, such as eB2B marketplaces and Q-commerce, challenges traditional networks. Brands that skip wholesalers and employ D2C or quick-delivery platforms create tension and frustration.

Strategies to Address These Challenges

The paper recommends a technology-driven approach to regulating matters:

1. Use unified platforms (e.g., Sales Force Automation (SFA), Distributor Management Systems (DMS), store apps) to improve communication, data flow, and cooperation.

2. Adopt AI for productivity enhancements such as route planning, stock suggestions, and problem solutions.

3. Create in-house eB2B channels to restore control of data and relationships instead of relying on third-party marketplaces.

4. To offset cost concerns, prioritize premiumization and growth into semi-urban/rural areas.

Technological Advancements Shaping the FMCG Landscape

Role of Artificial Intelligence (AI) and Data Analytics

FMCG companies are using AI for hyper-personalization, chatbots, and real-time analytics. Examples include AI-driven consultations in healthcare and edge computing* for automation.

*Edge computing is a distributed computer model that handles data locally rather than transferring it to a data center or cloud.

EY India’s latest report, among others, showed that 48% of respondents mentioned they managed to carry out proof of concept (POC) by using GenAI in their companies.

Another 32% of organizations said they are either looking forward to investing in GenAI or have already dedicated resources to this.

E-commerce Innovations and Their Impact

According to GlobalData, the e-commerce market in India is expected to hit US$326.7 billion in 2029, with a CAGR of 11.5% between 2025 and 2029.

Notes:

“f” = forecast, “e” = estimated.

This growth will be influenced by several factors, including:

• Consumers having a strong desire for internet purchasing

• Increased trust in digital payments

• Government policy support

In addition, several innovations will push the market further. This includes:

• AI and GenAI (tools for personalized recommendations, chatbots, and decision assistance)

• Q-commerce (tools for personalized recommendations, chatbots, and decision aids)

• Social commerce (viral buying via social media)

• Hyper-Value and subscription models (tools for personalized recommendations, chatbots, and decision aids).

Future Outlook: Innovations, Opportunities, and Trends Influencing the FMCG in India

Innovations in AI, Machine Learning (ML), and sustainability are likely to continue to propel the FMCG industry in India.

There are huge opportunities in rural expansion and exports (e.g., makhana, the global market which is expected to be valued at US$97.5 billion by 2030).

Did you know that:

• Four years ago, just 30% of sales of premium FMCG products came from villages and small towns; today, this figure has reached 42%.

• With 5,000 clean-label goods being introduced in 2023 and Ayurveda (dietary supplements, which are not regulated as medicine) gaining credibility, health and wellness are the main trends.

• Digital impact (56% trust Instagram), sustainability, and private labels (25-40% less expensive) are all growing.

Sub-sector Trends

Sub-Sector	Demand Trends	Supply Trends
Household & Personal Care	1. Growing demand for budget-friendly options: a) Around 45% of urban consumers choose affordable brands. b) There is a buying appetite for cleaning, skincare, and grooming products. 2. Buyers are ready to spend more for green, pet-safe, antibacterial, and biodegradable household goods.	1. Brands are introducing low-cost, smaller packs to increase product affordability and brand loyalty. 2. Premiumization in skincare and home care (with a focus on anti-aging, hydration, and skin-brightening products).  Demand is rising for premium antibacterial household cleaners.
Food & Beverages	1. Health-conscious consumers: 78% are ready to pay extra for healthier snacks/beverages. 2. More customers opt for minimal-ingredient foods with no additives.	1. Private label growth: Food products under private label cost 25-40% less than branded options. 2. Local F&B brands are winning consumer trust, being preferred by 45% of Indian consumers.
Healthcare	1. Growing trust in Ayurveda (belief: 36%) and side-effect-free nutraceuticals (belief: 61%) 2. Rise of digital and self-diagnosis health trends: - 71% of households used nutraceuticals in the past year. For health advice: - 56% trust Instagram influencers - 39% trust YouTube.	1. AI and personalized healthcare growth: - D2C brands provide in-home consultations for gut health, stress, and skincare. - GenAI health coaches offer tailored suggestions. 2. Government push for transparency and AYUSH* growth (increasing the AYUSH budget by 23.7%)

Based on data from the India Macro Indicators

*AYUSH is an acronym for Ayurveda, Yoga & Naturopathy, Unani, Siddha, and Homeopathy.

Conclusion: The Path Forward for the FMCG Industry in India

The FMCG industry in India is going through an important phase, powered by demographic advantages, advances in technology, and supportive legislation.

Due to the development of rural regions, the integration of advanced technologies, and the development of e-commerce, India’s FMCG industry can hope for impressive economic progress, creating productive pathways for study, investment, and strategy.