FMCG: Needs a check on inflation, early implementation of GST Fast moving consumer goods (FMCG) sector in India is one

of the largest sectors in the economy with estimated total market size of around Rs 110,000 crore in 2010. After sluggish growth for couple of years through 2002-2004, the segment has picked up the speed again and has been clocking substantial growth numbers during last 5-6 years. The sector also continued to do reasonably well following the global financial crisis as the rural India, which has become the new demand heaven for the industry, remained largely aloof from the slowdown. With the Indian economy now back on the high growth trajectory, the industry has massive potential to grow further, particularly in rural Indian and the high end products. FMCGs growth story started following the deregulation of Indian economy in early 1990s which saw dismantling of the license raj, resulting in a spurt in new companies and entry of a number of foreign brands. With relatively lesser capital and technological requirements, a number of new brands emerged domestically as well while the relaxed FDI conditions led to induction of many global players in the segment. Both these factors resulted in leading to rapid development of the FMCG market in India.

Availability of key raw materials, cheaper labour costs and presence across the entire value chain has provided Indian companies with a key competitive advantage in the twenty-first century. Riding on a rapidly growing economy, increasing per-capita incomes, and rising trend of urbanization, the FMCG market in India is expected to further expand to Rs 1,80,000 crore by 2015. Industry Characteristics MNCs heaven: Indian FMCG sector is characterized by strong presence of multi national companies. Global majors like P&G, Hindustan Unilever, ITC and Nestle compete with indigenous houses like Godreg, Dabur, Jyoti Laboratories and Emami etc. Unorganized segment: The market is characterized by huge presence of unorganized sector which, despite decline in share after the deregulation, still constitutes around 30% of the total market. Unorganized sector products are particularly popular in rural and semi urban areas of the country.