Easing inflation, GST tweaks lift FMCG outlook for 2026

Industry executives say demand conditions improving after a long period of sluggish growth

- Suneera Tandon

Easing food inflation, GST changes, supportive macroeconomics to aid demand.

Consumer goods companies are heading into 2026 expecting a pickup in volume-led growth, supported by stable commodity costs, easing inflation and revised goods and services tax (GST) rates, even as a weakening rupee continues to pose risks to margin guidance.

Senior executives across fast-moving consumer goods (FMCG) and consumer durables companies said demand conditions are improving after a prolonged period of sluggish growth, aided by easing food inflation, GST changes and a more supportive macroeconomic environment.

“If I had to look ahead to 2026, a large part of growth is likely to be volume-led. Commodity prices have softened and GST changes have kicked in, so in the food industry—where I have better visibility—you should see much healthier volume growth in 2026, especially compared to the first half of 2025,” said Manish Tiwary, chairman and managing director, Nestlé India.

Tiwary said improving consumer sentiment, aided by GST changes and a milder commodity outlook, is beginning to reflect in impulse-driven, low-ticket categories, even as macroeconomic improvements take time to translate into higher wallet share.