12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

GROWING ATTRACTIVE
DEMAND OPPORTUNITIES

* Indian food processing market * Entrepreneurs interested in

size reached US$ 307.2 billion in setting up the food-related
2022 and is expected to reach FMCG industry can set up their
US$ 547.3 billion by 2028, processing units in the
exhibiting a growth rate (CAGR) government-designated agro-
of 9.5% during 2023-2028.​ processing clusters, which helps
cut down the plant setup costs. ​
* Digital advertising grew to reach
US$ 9.92 billion by 2023, with the * With the advent of online retail
FMCG industry being the and e-commerce, FMCG
biggest contributor at 42% share businesses are able to market
of the total digital spend.​ and sell their products across
the country without investing
* As per CRISIL, India's dairy
much in marketing activities.​
industry is projected to
experience a healthy revenue

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 1/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

growth of 13-14% in FY25, driven

by strong consumer demand
and increased raw milk supply. ​

POLICY HIGHER
SUPPORT INVESTMENTS

* Union Budget 2023-24 has * In February 2024, Varun

allocated US$ 976 million for PLI Beverages announced of
schemes that aims to reduce investing Rs. 3,500 crore (US$
import costs, improve the cost 421.69 million) to setup
competitiveness of domestically manufacturing plants, while
produced goods, increase generating 1,500 employment
domestic capacity, and promote opportunities.
exports.​
* In January 2023, ITC announced
* Union budget 2023-24 focuses plans to acquire 100% of
on reviving rural demand by Sproutlife Foods, a D2C startup
boosting disposable income, and parent company of health
allocation to farms and higher food brand 'Yoga Bar' over a
fund allocation on rural period of three to four years.​
infrastructure, connectivity, and
mobility to create long-term
jobs.​

SNAPSHOT SHOWCASE INFOGRAPHICS REPORTS

RELATED NEWS

Last updated: Sep, 2024

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 2/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

FMCG INDUSTRY REPORT

 Aug, 2024

The FMCG sector in India expanded due to consumer-driven growth and higher product
prices, especially for essential goods. FMCG market reached US$ 167 billion as of 2023. The
total revenue of the FMCG market is expected to grow at a CAGR of 27.9% from 2021-27,
reaching nearly US$ 615.87 billion. In 2022, the urban segment contributed 65% whereas rural
India contributed more than 35% to the overall annual FMCG sales. Good harvest, government
spending expected to aid rural demand recovery in FY24. India’s fast-moving consumer
goods (FMCG) sector grew 6.4% by volumes in the October-December 2023 quarter, led by
positive consumption across the country. The sector had grown 8.5% in revenues and 2.5% in
volumes in FY23. In the January-June period of 2022, the sector witnessed valueLOGIN
growth of
about 8.4% on account of price hikes due to inflationary pressures. In the second quarter of
2022, the FMCG sector clocked a value growth of 10.9% YoY — higher than the 6% YoY value

growth seen in the first quarter. India includes 780 million internet users, where an average 
Indian person spends around 7.3 hours per day on their smartphone, one of the highest in
the world. Resilience needs to be the key factor in the manufacturing process, daily
operations, retail and logistic channels, consumer insights and communication that will help
FMCG companies to withstand the test of time and create more value for consumers in the
long run.
India’s FMCG sector has long been the top spender in the country’s advertising market,
commanding nearly one third share Rs. 31,000 Crore (US$ 3.75 billion) in 2023 of the total
Advertising expenditure.
Indian food processing market size reached US$ 307.2 billion in 2022 and is expected to reach
US$ 470 billion by 2028, exhibiting a growth rate (CAGR) of 9.5% during 2023-2028. Digital
advertising grew to reach US$ 9.92 billion by 2023, with the FMCG industry being the biggest
contributor at 42% share of the total digital spend. From April 2000-March 2024, the food
processing industry received US$ 12,587 million in FDI. The Union government approved a
new PLI scheme for the food processing sector, with a budget outlay of Rs. 109 billion (US$
1.46 billion). Incentives under the scheme will be disbursed for six years to 2026-27.
In February 2024, Varun Beverages announced of investing Rs. 3,500 crore (US$ 421.69
million) to setup manufacturing plants, while generating 1,500 employment opportunities.
In October 2023, Unilever announced that it had entered into an agreement to sell Dollar
Shave Club with completion expected before the end of 2023. Unilever will retain a minority
shareholding of 35%.
In June 2023, Skincare brand VLCC acquires men's grooming brand Ustraa.
In May 2023, Reliance Retail Ventures completes the acquisition of a controlling stake in
Lotus Chocolate.

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 3/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

In January 2023, ITC announced plans to acquire 100% of Sproutlife Foods, a D2C startup and
parent company of health food brand 'Yoga Bar' over a period of three to four years. In
December 2022, Hindustan Unilever Limited announced its foray into the ‘Health &
Wellbeing’ category through strategic investments in Zywie Ventures Private Limited
(“OZiva”) and Nutritionalab Private Limited (“Wellbeing Nutrition”).
Entrepreneurs interested in setting up the food-related FMCG industry can set up their
processing units in the government-designated agro-processing clusters, which help cut
down the plant setup costs. With the advent of online retail and e-commerce, FMCG
businesses can market and sell their products across the country without investing much in
marketing activities.
Union Budget 2023-24 has allocated US$ 976 million for PLI schemes that aim to reduce
import costs, improve the cost competitiveness of domestically produced goods, increase
domestic capacity, and promote exports. Union budget 2023-24 focuses on reviving rural
demand by boosting disposable income, allocation to farms and higher fund allocation on
rural infrastructure, connectivity, and mobility to create long-term jobs.
The FMCG sector employs around three million people accounting for approximately 5% of
the total factory employment in India. FMCG sales in the country were expected to grow 7-9%
by revenues in 2022-23. The key growth drivers for the sector include favourable Government
initiatives & policies, a growing rural market and youth population, new branded products,
and the growth of e-commerce platforms. The number of active internet users in India will
increase to 900 million by 2025 from 622 million in 2020. In 2022, India’s consumer spending
was US$ 2,049.57 billion. Indian villages, which contribute more than 35% to overall annual
FMCG sales, are crucial for the overall revival of the sector. E-commerce now accounts for 17%
of the overall FMCG consumption among evolved buyers, who are affluent and make average
spending of about Rs. 5,620 (US$ 68).
The food and beverage sector is one of the essential components of the FMCG market, which
accounts for about 3% of its GDP. In 2022, food and beverages accounted for 30% of total
household spending in the country.
For 51% of Indians, spending on healthcare products increased in the 12 months to August
2021. The covid-19 pandemic has driven Indian consumers to focus their spending priorities
on healthcare.
The personal and household care category in the FMCG sector grew from 32% in 2019 to 40%
in 2020. Indian households spent nearly Rs. 47 Lakh crore (US$ 60 billion) on FCMG, in the
year ending February 2021.
The FMCG sector’s revenue reached Rs. 4.7 lakh crore (US$ 56.8 billion) as of December 2022.
FMCG sales in the country grew 7-9% by revenues in 2022-23. The FMCG industry has grown
by 10.9% in the quarter ending June 2022, versus 6% in the previous quarter. The sector had
grown 8.5% in revenues and 2.5% in volumes last fiscal year. In the January-June period of
2022, the sector witnessed value growth of about 8.4% on account of price hikes due to
inflationary pressures. Consumption in urban markets sustained at 1.2% during the
September 2022 quarter as compared to 0.6% in the quarter that ended June 2022. Rural
https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 4/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

households play an important role, contributing 35-36% Of India’s FMCG market. Small
manufacturers (apart from the Top 400 players or manufacturers with less than US$ 13.6
million (Rs. 112 crore) offtake this year) are driving consumption and witnessed a positive
volume growth of 0.5% in Q3 of 2022. The total revenue of the FMCG market is expected to
grow at a CAGR of 27.9% from 2021 to 2027, reaching nearly US$ 615.87 billion. The Indian
health-tech market is expected to grow at a CAGR of 39% and touch US$ 50 billion by 2033.
Accounting for a revenue share of around 65%, the urban segment is the largest contributor
to the overall revenue generated by the FMCG sector in India in 2022. India's villages
contributed more than 35% to overall annual FMCG sales in 2022. In Q2, 2022, the FMCG sector
clocked a value growth of 10.9% year-on-year — higher than the 6 per cent y-o-y value growth
seen in Q1. Urban markets clocked a positive volume growth of 0.6%. Good seasonal harvests,
resulting in improved liquidity in the hands of farmers, higher government spending on infra,
and the wedding season are aiding consumer sentiment in India's villages. Dabur India
derived about 47% of its sales from rural India, and it is stepping up direct distribution to
cover more than 100,000 villages as demand starts recovering in rural areas. Rural markets
contribute about 45% to Emami's annual sales. Nestle India plans to expand its reach to
1,20,000 villages by the end of 2024. In 2022, the month of November saw rural volumes
growing 6-7%, compared to 2-3% in the previous two quarters. Good harvest, government
spending expected to aid rural demand recovery in FY24
In the third quarter of 2023, urban markets experienced an enhancement in the non-food
sector, witnessing a consumption growth rate of +10.4%, which marked an increase from the
previous quarter's +8.9%.
While modern trade maintains its high double-digit growth of 19.5%, rural markets are still
recovering at a volume growth rate of 6.4%. The growth rates in the food and non-food
categories are 8.7%, respectively.
The Indian e-commerce market is anticipated to grow from US$ 83 billion in 2022 to US$ 185
billion in 2026.
As per CRISIL, India's dairy industry is projected to experience a healthy revenue growth of 13-
14% in FY25, driven by strong consumer demand and increased raw milk supply.
The market has grown exponentially over the past five years due to the surge in internet and
smartphone users, improved policy reforms, and an increase in disposable income. Mobile
wallets, Internet banking, and debit/credit cards have become popular among customers for
making transactions on e-commerce platforms. India includes 780 million internet users,
where an average Indian person spends around 7.3 hours per day on their smartphone, one
of the highest in the world. As of 2021, there were 1.2 million daily e-commerce transactions.
The total value of digital transactions stood at US$ 300 billion in 2021 and is projected to reach
US$ 1 trillion by 2026. The India online grocery market size has been projected to grow from
US$ 4,540 million in 2022 to US$ 76,761.0 million by 2032, at a CAGR of 32.7% through 2032.
Zepto saw the highest increase in both Daily Active Users (DAUs) & Monthly Active Users
(MAUs) in November 2023 at 8% & 10% respectively. India’s beauty and personal care market,

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 5/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

presently valued at US$ 16.8 billion, is poised to grow at a compound annual rate of 11%, with
cosmetics and perfumes categories growing at a faster clip.
India's economy continues to grow at the highest rate in the world, outpacing that of
emerging and developing Asia and economic expectations for China. India has been ranked
as the fifth-largest economy in terms of exchange rate and the third-largest economy in
terms of purchasing power parity. In the fiscal year 2023, the Indian economy is expected to
grow at 6.5% against 7% in 2022 and 8.7% in 2021. India’s GDP growth was projected in a
range of 6-6.8% for the fiscal year 2023-24. India’s GDP per Capita reached US$ 2,850 in 2024,
compared with US$ 2,610 in 2023. India’s GDP Per Capita data is updated yearly, available
from March 1958 to March 2022, with an average number of US$ 323.24. India’s GDP can grow
from the current US$ 3 trillion to US$ 9 trillion by 2030, and US$ 40 trillion by 2047, if the
country’s working-age population — which is expected to increase by over 100 million people
between 2020-30, is productively employed.
The governments’ incentives and the FDI funds have helped the FMCG sector strengthen
employment, establish a more robust supply chain, and capture high visibility for FMCG
brands across established retail markets. In December 2022, Hindustan Unilever Limited
announced its foray into the ‘Health & Wellbeing’ category through strategic investments in
Zywie Ventures Private Limited (“OZiva”) and Nutritionalab Private Limited (“Wellbeing
Nutrition”). In October 2022, Dabur India Limited announced the acquisition of a 51% stake in
Badshah Masala Private Limited for Rs. 587.52 crore (US$ 71 million). In 2021, Britannia
Industries planned to invest Rs. 94 crore (US$ 11.3 million) to add two new manufacturing
lines that will increase its capacity by 85% from the current 35,000 metric tonnes to 65,000
metric tonnes per annum.
Fast-moving consumer goods (FMCG) is the fourth-largest sector in the Indian economy.
There are three main segments in the sector food and beverages, which accounts for 19% of
the sector; healthcare, which accounts for 31% of the share; and household and personal care,
which accounts for the remaining 50% share. The urban segment contributes to about 65% of
the revenue share, while the rural segment accounts for 35%. The rise in rural consumption
will drive the FMCG market. The Indian processed food market is projected to expand to US$
470 billion by 2025.
Final consumption expenditure increased at a CAGR of 8.8% during 2015-22.
The India online grocery market size was projected to grow from US$ 4,540 million in 2022 to
US$ 76,761.0 million by 2032, at a CAGR of 32.7% through 2032. By 2030, it is expected to have
an annual gross merchandise value of US$ 350 billion.
The FMCG sector has received good investments and support from the Government in the
recent past. Union Budget 2023-24 has allocated US$ 976 million for PLI schemes that aims
to reduce import costs, improve the cost competitiveness of domestically produced goods,
increase domestic capacity, and promote exports. In 2021-22, the government approved the
Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) with an outlay of
Rs. 10,900 crore (US$ 1.4 billion) to help Indian brands of food products in the international
markets.
https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 6/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

In Q3, FY23, the FMCG sector clocked a value growth of 9.0% Y-o-Y — lower than the 9.2% Y-o-
Y value growth seen in Q3 FY22.
According to NielsenIQ’s report, in 2024, the FMCG industry in India is expected to grow
between 4.5-6.5%, owing to strength in the sector and Indian economy.
In October 2022, Dabur acquired a 51% stake in Badshah Masala Private Limited for Rs. 587.52
crore (US$ 71.81 million) less proportionate debt as on the closing date, with the Badshah
enterprise being valued at Rs. 1,152 crore (US$ 140.81 million).
The outlook of the FMCG sector looks on track with the pandemic easing out. Rural
consumption has increased, led by a combination of increasing income and higher aspiration
levels. There is an increased demand for branded products in rural India. On the other hand,
with the share of the unorganised market in the FMCG sector falling, the organised sector
growth is expected to rise with an increased level of brand consciousness, augmented by the
growth in modern retail. The FMCG market in India is expected to increase at a CAGR of 14.9%
to reach US$ 220 billion by 2025, from US$ 110 billion in 2020.

Major FMCG cities

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 7/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 8/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

MORE 

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 9/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

IBEF BLOG MORE 

Partners

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 10/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 11/12
12/19/24, 4:40 AM Indian FMCG Industry Analysis | IBEF

https://www.ibef.org/industry/fmcg-presentation#:~:text=FMCG Industry Report&text=The FMCG sector in India,reaching nearly US%24 615.87 billion. 12/12