The festive season in India has given a significant boost to the fast-moving consumer goods (FMCG) sector, with Diwali sales soaring. Key drivers of this surge include reduced Goods and Services Tax (GST) rates, which have made essential goods like dairy, soaps, and oils more affordable. With strong sales reported across categories, companies such as Parle Products have seen a 15-20% rise in primary-level sales, while Adani Wilmar has reported a 5% increase in YoY volume for Q2 FY26.
GST Reforms Fuel Growth
The GST overhaul in September 2025, which simplified tax slabs and reduced taxes on everyday items, has significantly bolstered FMCG demand. Analysts predict these changes will contribute to a 2-3% growth in the sector this festive season. This has been especially beneficial in rural markets, where access to affordable essentials has spurred consumption.
Dairy Leads the Pack
Dairy products have been a standout category during Diwali. With increased consumption of milk, ghee, and sweets, FMCG companies like Amul and Britannia have seen significant sales upticks. This is reflective of the broader trend where dairy is a central part of festive celebrations, not just in urban centres but also in tier-II and tier-III cities.
E-commerce and Rural Demand
The role of e-commerce and quick commerce platforms cannot be understated. These digital channels have expanded FMCG access, especially in rural regions, where sales are growing rapidly. Reports show that tier-II and tier-III cities account for over 85% of the growth in FMCG volumes during the festive season.
Looking Ahead: Optimism for FY26
As the FMCG sector recovers from the slowdown in FY25, the outlook for FY26 remains positive. Lower inflation, reduced input costs, and continued consumer optimism are expected to fuel further growth, particularly with value-driven buying patterns. The Diwali surge, particularly in dairy and essentials, signals a strong festive season and sets the stage for sustained growth in the coming months.
