FMCG volume growth slows to 5.4% in September quarter despite 12.9% value growth

New Delhi: Sales growth in India’s fast-moving consumer goods (FMCG) sector slowed during the July–September quarter, weighed down by disruptions linked to GST rate changes, even as value growth strengthened, according to the latest report from data analytics firm NielsenIQ.

FMCG volume growth stood at 5.4% during the September quarter, while value growth increased to 12.9%. Price growth during the period was recorded at 7.1%.

Rural markets also saw a moderation in growth, easing to 7.7% year-on-year from 8.4%, but continued to outpace urban markets for the seventh consecutive quarter, the report said.

“The market recorded a 5.4% rise in volume alongside a 7.1% increase in prices, with unit growth outpacing overall volume growth, signalling a stronger consumer preference for smaller packs,” it said.

Urban markets, which account for the bulk of FMCG demand, showed moderate recovery, particularly in smaller towns, though they experienced a sequential slowdown. Rural markets, driven largely by affordability-led consumption of small packs, account for around 38% of FMCG demand.

“Rural India has recorded a 7.7% increase compared to 3.7% in urban areas, outpacing urban regions in volume growth for the seventh consecutive quarter. However, the gap is narrowing as urban areas show signs of sequential recovery,” the report said.

It added, “This recuperation is primarily driven by smaller urban towns. In the March quarter and September quarter of 2025, rural market had reported a growth of 8.3% and 8.4%, respectively.”

Metropolitan markets continued to witness a decline in offline sales as consumers shifted towards e-commerce. However, modern trade channels showed signs of revival during the quarter.

“The Indian FMCG sector continues to demonstrate resilience, with rural markets leading the charge for the seventh consecutive quarter. While urban recovery is gaining traction, particularly in smaller towns, rural demand remains the cornerstone of volume expansion. E-commerce continues to be a key growth engine, especially in the top eight metros,” said Sharang Pant, Head of Customer Success FMCG, NielsenIQ India.

E-commerce reported growth in FMCG sales during the quarter, with its share of overall sales increasing by one percentage point across the eight major metropolitan markets.

“Q3 ’25 (September quarter) omni-channel volume growth remains driven by e-commerce, with modern trade also contributing this quarter. However, a marginal softening in e-commerce volume growth is observed in Q3 ’25,” it said.

With inflation showing signs of easing, the consumption outlook remains optimistic, and the impact of GST changes on consumer demand is expected to become clearer over the next two quarters, Pant added.

The transition to GST 2.0 also temporarily slowed growth in the home and personal care (HPC) segment, which includes lotions, creams, personal hygiene products such as shampoos and soaps, dental care items, diapers and household products.

“In Q3 2025, food consumption largely remained stable at 5.4%, driven by a balance in increased volumes in staples categories and a decline in volumes in impulse and habit-forming categories. Meanwhile, home and personal care slowed down in volumes with 5.5% consumption growth,” the report said.

Over-the-counter categories, largely sold through pharmaceutical channels, recorded a 14.8% increase in value sales, primarily driven by a 9.7% rise in prices.

Small manufacturers continued to support FMCG consumption during the quarter, aided by steady volume growth across both food and HPC categories on a lower base.

“In contrast, large players saw a slowdown in consumption in the latest quarter,” it said.