Budget 2025: What does the FMCG sector expect from Budget 2025?

New Delhi| FMSG companies producing daily consumer goods faced a slowdown in consumption in 2024. The main reason for this is the increase in costs due to inflation and increased interest rates and rising prices of raw materials. Companies say that we are alert about 2025 and are also expecting that in the upcoming budget, we are demanding the government to increase the schemes encouraged for rural areas to maintain the momentum in the country’s economy. The industry has demanded that the government provide income tax relief to the salaried class to promote consumption and has demanded to increase policies related to the industry.

When we look towards 2025, we are cautiously optimistic which is supported by the improvement in the economic outlook and our focus on market growth says Sunil Agarwal, Founder and President, Joy Personal Care K (Global). In the upcoming budget, such measures should be considered to encourage consumption in the country’s economy, which will continuously increase consumption and keep accelerating the cycle of economic development.

Asafi Malbari, CFO, Godrej Consumer Products Ltd, said urban markets have remained stable, while there has been an encouraging improvement in demand in rural areas, although the improvement has come from a smaller base. We hope that this recovery, combined with improved seasonality and commodity price stabilization, will drive growth in the coming quarters. The industry is demanding from the government to implement such policies in the budget, in which expenditure in the market can increase and inflation can be controlled.

Sunil D’Souza, managing director and chief executive authority of Tata Consumer Products Ltd, said it was quite optimistic about 2025. Facilities like premiumization, health and welfare are expected to increase rapidly in the country, the government is continuously paying attention to this. Due to which companies will have good opportunities. By promoting consumption in the budget as well as cutting tax rates, common people will save money to spend.

According to the report of Axis Securities, the cost of FMCG companies is increasing due to rising prices of raw materials. Due to which companies have had to increase the prices of their products. According to a report, most of the major input costs remained high in the third quarter, which will impact the gross margins of companies. Due to increase in prices of commodities, especially agriculture and commodities, there may be pressure on the gross margins of companies. Companies expect demand to continue in the third quarter.

The government can announce subsidies for rural and agricultural sectors in the budget and incentive schemes to promote rural development. At the same time, monsoon has been better than normal, this will improve agricultural production. This will boost rural consumption and help in quickly stabilizing agricultural inflation. Due to these reasons the demand in the rural market will be more than the urban demand.