FMCG sector: Sales growth slows in September quarter as GST changes hit volumes; rural markets outpace cities again

Sales growth in India’s fast-moving consumer goods (FMCG) sector eased in the September quarter, with volume growth slipping to 5.4 per cent due to disruptions linked to GST rate changes, even as value growth rose to 12.9 per cent, according to data from NielsenIQ.

The report said rural markets continued to expand faster than urban areas for the seventh straight quarter, though the pace softened slightly from 8.4 per cent to 7.7 per cent year-on-year.

According to news agency PTI, NielsenIQ noted that the overall market recorded a 5.4 per cent volume rise alongside a 7.1 per cent increase in prices, and that unit growth exceeded volume growth, suggesting stronger demand for smaller packs.


Rural India, which accounts for around 38 per cent of FMCG demand and is driven by affordability, maintained its lead with 7.7 per cent growth compared with 3.7 per cent in urban regions.

However, the gap narrowed as smaller urban towns showed signs of recovery, even though sequential growth in cities slowed.

The report highlighted that metropolitan areas continued to witness a decline in offline sales as more consumers shifted towards e-commerce. Modern trade channels, however, showed signs of revival.

Sharang Pant, head of customer success – FMCG at NielsenIQ India, was quoted by PTI as saying that the sector “continues to demonstrate resilience” with rural markets remaining the “cornerstone of volume expansion”, while e-commerce remained a “key growth engine”, particularly in the top eight metros.

As per PTI, e-commerce’s share in FMCG sales rose by one percentage point across metros, although Q3 2025 saw a slight easing in its volume growth. With inflation cooling, NielsenIQ expects consumption to stay positive, though the effects of GST changes may play out over the next two quarters.

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

Food consumption held steady at 5.4 per cent, driven by higher volumes in staples, while impulse and habit-led categories saw declines. HPC volumes grew 5.5 per cent.

Small manufacturers continued to support sector growth with steady expansion across food and HPC categories, while larger players experienced a slowdown in consumption, the report said.


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