Fast-moving consumer goods sector is India’s fourth-largest sector.

Household and
personal care contribute to 50% of FMCG sales in India. Growing awareness among the
consumers together with changing life style, increasing disposable income and easier
access has become the key growth drivers for the sector. With modern trade being
expected to grow at 20-25% per annum, it is estimated that the retail market of India will
reach US$ 2.2 trillion by 2025. This shift will boost the revenue of FMCG companies. Also
the processed food sector of India is projected to expand to US$470 billion by that time
frame. It is also worth noting that the advertising volumes on television recorded a healthy
growth in the recent times, which also throws light on the con dence of various players in
the sector.

FMCG revenue over years (US$ billion)

110

82.5

55

27.5

0
2016 2017 2018 2019 2020

Investments
The sector has witnessed a healthy foreign in ow of approximately US$20 billion during
the time period of April 2000 to March 2022. While Government has allowed 100% FDI in
single-brand retail and food processing and 51% in multi brand retail. These developments
had had a positive impact on investor sentiment towards FMCG market in India. Some
recent development that can be noted in this connection includes the following. In June
2022, PepsiCo India announced its expansion plans with an investment plan of 186 crore,
In April 2022, Dabur announced its plan to induct 100 electric vehicle to its supply chain
and Emami acquired Dermicool from Reckitt for a sum of 432 crore, etc…

Government Initiatives
Government of India has taken various measures to promote the FMCG sector In India.
The Union budget 2022-23, set aside 1725 crore for the department of consumer affairs
and 215960 crore to the Department of Food and public distribution. In Financial year
2021-22, government had approved a production linked incentive scheme for the food
processing industry. This scheme had an outlay of 10900 crore to help Indian food product
brands in the international market.
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Road Ahead for FMCG
With an increase in rural consumption, led by an increase in disposable income and higher
aspiration levels, the demand for branded products are increasing in rural India. Also we
have on the other hand, the share of unorganised market falling. With the growth of
modern retail and afore mentioned reasons, the share of organised sector is expected to
go up.

Another determining factor here is the growing youth population. They brings change in
trends in food and beverage industry with trend such us cooking in home changing to
online ordering. Internet connectivity is also a market disrupting factor here. Online portals
are paying a key role here. It is forecasted that the number of internet users will reach 1
billion mark by 2025 in India. With approximately 40% of all the FMCG consumption in
India made by online, The E commerce share of total FMCG slaes is forcated to go up by
about 11% by 2030.

Government’s move such as implementation of GST, demonetisation etc… are also

playing a pivotal role here. These moves are implemented with an expectation to drive
demand in urban and rural area and to promote growth of the nation in various sectors in a
systematic manner.