India’s fast-moving consumer goods (FMCG) sector continued to demonstrate strong resilience in the April–June 2025 quarter, clocking a robust 13.9% growth in value, according to a new report published by NielsenIQ. This marks the sixth consecutive quarter in which rural demand has outpaced urban demand, highlighting the sustained strength of consumption in India’s hinterlands.
While rural demand grew by 8.4% during the quarter, urban demand increased by 4.6%, narrowing the gap slightly as urban markets showed signs of sequential recovery, particularly in Tier-II and Tier-III towns.

According to the report, volume growth for the quarter stood at 6%, with unit growth exceeding volume growth as consumers increasingly opted for smaller, value-led pack sizes. This suggests consumers remain price-sensitive, even as overall consumption trends remain positive.

Rural Demand Leads, Urban Markets Recover

Mr. Sharang Pant, Head of FMCG customer success at NielsenIQ India, stated that rural demand remains the cornerstone of volume expansion, attributing the sector’s strong performance to improved demand in non-urban regions. At the same time, he noted that urban recovery is gaining momentum, especially across smaller towns and emerging urban centres.

The report attributes this improving consumption sentiment to easing inflationary pressures and a favourable monsoon forecast, both of which are expected to support purchasing power in the coming quarters.
To maintain this momentum, the report recommends that companies focus on deeper channel engagement and value-led propositions in order to meet the evolving needs of consumers in both rural and urban India.

The Rise of E-commerce and Small Manufacturers

One of the most important sector trends highlighted in the report is the rapid growth of e-commerce, which continued to gain share in the quarter and is now closing the gap with modern trade in the eight largest metropolitan areas. Notably, southern metros emerged as the leaders in e-commerce penetration, holding an 18.4% share, compared with 15.8% for all eight metros combined.

Although e-commerce currently represents only 11–13% of the FMCG market in metros, it accounts for over half of the omnichannel growth, reflecting a clear shift in consumer preference toward online shopping platforms.

The report also points to the increasingly competitive landscape driven by the accelerated growth of small manufacturers, whose performance is now outpacing the overall industry growth. This shift indicates changing market dynamics, with consumers increasingly experimenting with regional and niche brands that offer competitive prices and customisation.

Category-Wise Performance

• Food consumption recorded 5.5% growth in the quarter, supported by higher demand in staples and impulse categories.

• Home and personal care products witnessed a 7.5% increase in consumption, driven by increased focus on hygiene and grooming products.

• The over-the-counter (OTC) category registered a substantial 14.2% rise in value sales, largely due to an 11% increase in product prices, reflecting continued resilience in health-related categories.

Conclusion

In conclusion, the NielsenIQ report confirms that rural demand continued to outpace urban demand in the April–June 2025 period, providing a solid foundation for value and volume growth in India’s FMCG sector. The combination of easing inflation, positive monsoon expectations, and increasing e-commerce adoption supports an optimistic outlook for the industry.
With unit growth led by smaller packs, rapid growth from small manufacturers, and strengthened demand across food, personal care and OTC categories, the FMCG industry is expected to continue on a sustained growth trajectory.
To sustain the current momentum, the sector will need to focus on value-led innovation, deeper channel management and omnichannel engagement—ensuring that both rural consumers and urban shoppers remain at the centre of strategic planning and product development.

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