FMCG sector projected to grow at 7-9% In 2024

This growth is supported by the government’s efforts to boost consumption and generate employment opportunities. Notably, the risk index for the FMCG sector has decreased from 68 to 66.

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According to a report by ICICI Lombard General Insurance, the fast-moving consumer goods (FMCG) sector is projected to achieve a sustained growth rate of 7-9% in 2024, fueled by government initiatives aimed at boosting consumption and job creation.

The sector’s resilience and adaptability, supported by strong government backing and digital transformation efforts, position it well to navigate uncertainties and emerge stronger.

Despite this positive outlook, the sector faces challenges such as inflationary pressures, low consumer confidence, and high unemployment rates. Currently, the FMCG industry boasts a significant economic footprint exceeding Rs 9.1 lakh crore and plays a crucial role in driving India’s economic growth and employment.

Additionally, the online sales channel for FMCG is growing, now valued at Rs 1.7 lakh crore, with Direct-to-Consumer (D2C) segments reflecting rapid digital transformation and changing consumer purchase behavior. The industry, which struggled post-pandemic with consecutive quarters of decline in the rural sector, is now showing signs of recovery.

The report said, “Q3 2023 witnessed an impressive 8.6 per cent volume growth nationwide, with rural markets contributing significantly with a 6.4 per cent growth rate, indicating a favourable consumption environment.”

Government initiatives like Gati Shakti and Amrit Kaal Vision 2047 have been pivotal in strengthening the FMCG sector’s foundation and fostering long-term growth. Consequently, the risk index for the FMCG sector has decreased from 68 to 66.

The fast-moving consumer goods (FMCG) industry is a major contributor to the Indian economy, being the fourth-largest sector. Household and personal care products lead the market, accounting for 50% of the sector. Key growth drivers include rising incomes, changing lifestyles, increased awareness, and easier access to products, along with a growing trend toward sustainable products. While the urban sector holds the majority share, significant growth has also been observed in semi-urban and rural segments over the past decade.