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Market Reports

FMCG Industry in India: Market Overview, Growth Trends & Key Insights (2025)

Market Reports - FMCG Industry in India

1

Quick Facts: India’s FMCG Industry

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Overview of India’s FMCG Industry

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India’s FMCG Industry Segmentation Outlook

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Government Initiatives

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Megatrends in FMCG Industry

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Why Invest in India’s FMCG Industry?

Quick Facts: India’s FMCG Industry

  • The Fast Moving Consumer Goods (FMCG) industry in India is valued at INR 20.8 trillion in 2024 and is projected to reach INR 53.4 trillion by 2030, growing at a CAGR of 17%
  • FMCG is the 4th largest sector in the Indian economy, contributing significantly to the country’s GDP growth and industrial development
  • The FMCG sector provides direct employment to approximately 3 million people
  • The food processing industry received INR 1.1 trillion in FDI from April 2000 to December 2024
  • In the FMCG industry, rural markets outperformed urban markets in Q4 FY2024-25, achieving a growth rate of 9.9% compared to 2.6% in urban areas
  • India’s internet users are expected to reach 900 million by the end of FY 2025, supporting digital commerce growth in FMCG
  • E-commerce accounts for 17% of FMCG consumption among evolved buyers, with average spending of INR 5,620 per consumer
  • In 2024, quick commerce accounts for 70-75% of e-grocery orders, up from 35% in 2022, revolutionizing the retail landscape
  • The urban segment contributes 65% to overall annual FMCG sales, while the rural segment contributes 35%, rural segment showing a higher growth momentum

Overview of India’s FMCG Industry

The Fast-Moving Consumer Goods (FMCG) sector is the fourth-largest economic sector in India. This industry is experiencing steady growth, supported by high-turnover consumer packaged goods and it plays a significant role in the country’s industrial landscape. The sector has shown massive growth, driven by India’s favourable demographic profile, increasing disposable incomes and supportive government policies.

Growing awareness, easier access and changing lifestyles have emerged as key growth drivers. This shift indicates a fundamental change in consumption patterns and offers significant opportunities for industry growth. Government support has played a crucial role in the development of the FMCG industry through various initiatives. These include the Production-Linked Incentive (PLI) scheme for food processing, which has a budget of INR 109 billion. Additionally, vital Foreign Direct Investment (FDI) policies allow for 100% investment in food processing. Comprehensive regulatory frameworks have also been established to ensure consumer protection and product quality.

FMCG Industry Growth Overview in India (INR Trillion)

India’s FMCG Industry Segmentation Outlook

FMCG Industry Overview by Product Category

  • Household and Personal Care:
    The household and personal care segment holds a significant (around 50%) share of India’s FMCG market by product type segment, primarily due to increasing awareness of hygiene and grooming. A key trend in this segment is the rising demand for budget-friendly options. This segment encompasses a range of personal care products, including soaps, shampoos, skincare items, oral care products and household cleaning supplies.
  • Healthcare and hygiene:
    The healthcare and hygiene segment holds around 31% of India’s FMCG market by product type segment, covering pharmaceuticals, supplements, wellness and over-the-counter (OTC) products. Post-COVID health awareness and government initiatives like PLI schemes have driven strong growth. Additionally, traditional and Ayurvedic products play a role in this growth, highlighting India’s cultural preference for natural health solutions.
  • Food and Beverages:
    The food and beverages segment makes up 19% of India’s FMCG market by product type segment. The segment includes processed foods, dairy products, beverages and ready-to-eat meals. Growth in this sector is driven by strong demand in rural areas, urbanization, rising incomes and changing lifestyles. Additionally, there is an increasing consumer preference for convenient and packaged food options.

FMCG Industry Overview by Region

  • Urban:
    The urban segment accounts for a substantial 65% share of India’s FMCG market by region. The FMCG industry in urban areas benefits from higher disposable incomes, greater brand awareness and improved access to modern retail channels. Urban consumers often prefer premium products, driving growth in categories such as personal care, packaged foods and beverages. Furthermore, e-commerce and modern trade are important distribution channels in urban areas, offering convenience and a wide variety of products.
  • Rural:
    The rural segment accounts for a significant 35% of India’s FMCG market by region. In recent years, the rural FMCG market has been growing at a faster pace than its urban counterpart. This growth is driven by several factors, including increased rural incomes, government initiatives such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and improved distribution networks. Consumers in rural areas are increasingly preferring branded products, particularly in categories like food staples, personal care and home care. Furthermore, the expansion of digital connectivity and mobile penetration has facilitated access to e-commerce platforms, which has further strengthened FMCG sales in rural regions.
FMCG Industry Overview by Region, 2024

Government Initiatives

Production Linked Incentive (PLI) Scheme for Food Processing Industry

  • Government approved PLI scheme with a budget outlay of INR 109 billion for implementation from FY 2021-22 to FY 2026-27.
  • 182 applications approved under the scheme, including 30 applications for millet-based products (8 large entities and 22 SMEs).
  • The scheme provides financial incentives to promote domestic manufacturing and increase export competitiveness.

Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME)

  • With a budget of INR 100 billion, PMFME aims to support 2 lakh micro food processing enterprises over a period of five years (2020-2025).
  • The scheme provides direct assistance through credit-linked subsidies and the development of common infrastructure.
  • PMFME emphasizes the formalization of unorganized micro-enterprises and includes initiatives for skill development.

Bureau of Indian Standards (BIS) and Consumer Protection Framework

  • In 2024, the Bureau of Indian Standards (BIS) issued 187 Quality Control Orders aimed at ensuring consumer safety and product standardization.
  • The Compulsory Registration Scheme (CRS) now covers over 40 Fast-Moving Consumer Goods (FMCG) products to protect consumers from counterfeit items.
  • The Consumer Protection (E-commerce) Rules 2020 require transparency in pricing and the disclosure of seller information.
  • An enhanced regulatory framework has been established to ensure quality standards and compliance for FMCG product imports.

Megatrends in the FMCG Industry

Rural Market Expansion and Digital Penetration: Driving the Next Wave of FMCG Growth

  • Rural FMCG markets grew 9.9% in Q4 FY 2024-25, significantly outpacing urban growth of 2.6%, driven by government schemes and festive consumption.
  • Rural India accounts for over 35% of total annual FMCG sales and rural penetration is expected to drive further growth as incomes and access improve.
  • 5% of rural households report an increase in consumption, creating strong demand for affordable and diverse products.
  • Improvements in BharatNet connectivity and smartphone penetration in rural areas and tier-2 and tier-3 cities are unlocking new customer bases beyond metropolitan areas.

Sustainability and Health-Conscious Consumer Shift

  • The health and wellness segment of the FMCG industry is also experiencing significant growth, with consumers prioritizing products that boost immunity and offer functional benefits.
  • Increasing awareness about environmental impacts is leading to the adoption of sustainable packaging solutions and circular economy practices.

Premiumization and Market Consolidation: Evolving Consumer Preferences

  • Increasing penetration of organized retail and modern trade channels supporting premium product distribution.
  • Rising disposable incomes and lifestyle changes are driving demand for premium personal care and food products.

Quick Commerce and Last-Mile Delivery Innovation

  • Quick commerce now makes up 70-75% of total e-grocery orders, increased from 35% in 2022, transforming urban shopping patterns.
  • Third-party logistics providers handle 17 billion shipments, with over 50% of express parcel volume originating from e-commerce.
  • National Logistics Policy implementation streamlining supply chains and reducing operational costs for FMCG companies.

Why Invest in India’s FMCG Industry?

Robust FMCG Industry Growth

  • The FMCG industry in India is valued at INR 20.8 trillion and is projected to reach INR 53.4 trillion by 2030, growing at a CAGR of 17%.
  • The FMCG sector is the fourth-largest sector in the Indian economy, having demonstrated strength and consistent evolution with a growth rate of 10.6% in Q4 FY2024-25.
  • Consumer spending reached INR 204 trillion in 2024 and is expected to increase to INR 365.5 trillion by 2030.

Strong Government Policy Support and Investment Incentives

  • INR 109 Billion Production Linked Incentive (PLI) scheme for food processing, with additional INR 100 billion Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme providing comprehensive FMCG sector support.
  • 100% Foreign Direct Investment (FDI) allowed in food processing and single-brand retail, with 51% in multi-brand retail, enabling foreign investments.
  • INR 976 Million allocated for PLI schemes in Budget 2023-24 to reduce import costs and improve domestic competitiveness.

Growing Domestic Market and Consumption Base

  • The FMCG sector employs over 3 million people, which accounts for 5% of total manufacturing employment and has significant potential for expansion.
  • India has a median age of 28 years and with rising per capita income, there is a strong growth in sustainable consumption.
  • The growing middle class is expected to add 110 million households by 2030, significantly boosting consumption patterns.

Strategic Global Position and Export Competitiveness

  • The food processing sector received Foreign Direct Investment (FDI) of about INR 1.1 trillion between April 2000 and December 2024.
  • India’s central location in South Asia allows for access to emerging markets across Asia, the Middle East and Africa.
  • The country has established supply chain networks and manufacturing capabilities that support both domestic and export markets.
  • The government’s initiatives to promote exports and trade agreements have enhanced global market access for FMCG companies.

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