Growth hasn’t disappeared, but it has become more selective, more premium, and more policy-sensitive. Across categories, companies are seeing demand hold up, not because consumers are buying more, but because they are buying differently. And companies are responding with tighter execution instead of chasing raw volumes.

At a macro level, the resilience of India’s retail and consumer sector through the year has been underpinned by urban demand and the gradual formalisation of the economy.

Paresh Parekh, partner and national leader for tax – consumer products and retail sector at EY India, points out that organised retail penetration continues to improve, even as rural demand recovery remains gradual. A key marker of this shift has been compliance. Record-high GST collections, consistently crossing ₹1.6 lakh crore a month, reflect not just reforms at work but also underlying consumption strength and better adherence to the tax system.

In furniture, a largely unorganised category for decades, mandatory Bureau of Indian Standards (BIS) certification for several product categories marks a turning point. “India’s furniture industry is moving towards a more organised, premium and space-saving [model] with a greater focus on quality standards,” says Swapneel Nagarkar, business head and executive vice president at Interio by Godrej. He argues that furniture is increasingly being viewed as an essential household and workplace requirement, not a discretionary purchase — a case, he says, for policy support such as PLI inclusion and a lower GST rate than the current 18%.

At Bikaji Foods International, demand for packaged snacks remained robust across both urban and semi-urban markets, supported by stable consumption trends. According to CFO Rishabh Jain, recent GST revisions reduced the effective tax burden on certain food and snack categories, directly improving affordability for consumers. While the transition led to minor supply-side adjustments toward the end of Q2, Jain says these were temporary, with demand–supply operations remaining smooth through the year.

In parallel, India’s expanding FTA network, including agreements with the UAE, Australia and  UK, etc., is reshaping sourcing strategies, “improving export competitiveness and integrating Indian consumer companies into global value chains,” adds Parekh. 

Measured demand

This regulatory push is intersecting with a broader trend visible across sectors: value-led premiumisation. In consumer durables, 2025 was marked by a “relative slowdown” in consumption driven by environmental and macroeconomic factors, but premium segments continued to outperform. “Premium segments like frost-free refrigerators, split air conditioners and front-load washing machines [are] performing better than mass segments,” says Kamal Nandi, business head and EVP at the appliances business of Godrej Enterprises Group. Even as the industry saw degrowth, Godrej maintained double-digit growth, with washing machines leading, followed by air conditioners and refrigerators. 

Over half of its portfolio is now AI-powered, and the company expects over 20% growth by the end of the financial year, backed by affordability, accessibility and new launches.

FMCG tells a similar story, though with a sharper urban-rural contrast. Sunil Agarwal, chairman and co-founder of Joy Personal Care, expects demand to remain resilient into FY26, supported by steady consumption, deeper digital access and premiumisation in skincare. Rural and emerging markets, he says, still offer headroom as awareness and affordability improve, while urban consumers are driving growth through premium formats and higher-frequency usage. “FY26 will be about sharpening execution, and building a more future-ready portfolio that balances growth, accessibility and sustainability,” Agarwal notes.

Beyond pricing, Bikaji also saw clear shifts in consumer behaviour. “Consumer preferences continued to evolve toward convenient, value-for-money snacking options,” Jain notes, pointing to a gradual move toward better-quality products and premiumisation in select categories, alongside growing awareness around health and ingredient transparency. Despite inflationary pressures in inputs such as palm oil toward the end of Q2, margins improved year-on-year, aided by procurement efficiencies and operational discipline, a signal that consumption growth is increasingly being protected by execution rather than aggressive price hikes.

Looking ahead, the company expects to deliver healthy growth driven by sustained consumer demand, the positive impact of recent GST rationalisation, and improving macro-economic conditions. “With stable input costs, continued focus on operational efficiency, and favourable regulatory support, the outlook for the coming year remains positive,” he added. 

In accordance, Parekh notes that while rural demand recovery remains gradual, the outlook for 2026 is decisively positive “with growth increasingly driven by premiumisation, omnichannel expansion, private label scale-up and productivity-led margin improvement across the consumer ecosystem.”