Prime Minister Narendra Modi’s recent appeal to Indians to reduce international travel, avoid gold purchases and embrace work from home or hybrid models to save fuel and foreign exchange is likely to trigger some near term pressure on consumption, but India Inc believes it could also accelerate a deeper shift towards self-reliance and local demand creation.

Speaking at the CII's Business Summit, amid heightened geopolitical tensions and rising concerns around supply chain disruptions, inflation and energy costs, industry leaders said the current environment may temporarily alter spending behaviour, but India’s entrepreneurial ecosystem and economic fundamentals remain strong enough to absorb the shock.

Sanjeev Krishan, chairperson of PwC, said periods of disruption often create entirely new consumption opportunities. “All I would say is that there could be misses, but there’ll be hits,” Krishan said. “The whole quick commerce and e commerce piece, the whole ordering from home started when Covid happened.”

He said while austerity measures and supply chain disruptions could create challenges, Indian businesses have repeatedly shown an ability to adapt quickly.

“The Indian entrepreneurial ecosystem is such that we will find a solution to every problem,” he added.

Companies try to protect demand

For consumer goods companies already battling inflationary pressures, the bigger challenge lies in protecting demand without sharply raising prices.

Sudhanshu Vats, MD of Pidilite Industries, said the company has prioritised supply security given its dependence on hydrocarbon-linked raw materials. “There is a lot of raw material inflation,” Vats said, adding that the company has been increasing prices gradually rather than passing on the entire burden to consumers immediately.

“We are passing that only the absolute rupees in a staggered fashion,” he said. “We started in April, we’ve done a little bit in May, and if need be, we’ll do something going forward.”

He said the company is consciously sacrificing some profitability in the short term to preserve consumer demand. “We are taking everyone along and keeping the demand as robust as possible. We are sharing the pain,” Vats said.

For Shashwat Goenka, vice chairman at RP-Sanjiv Goenka Group, the Prime Minister’s message was closely aligned with the government’s push for atmanirbharta, or self-reliance. “The spirit of his message is to insulate ourselves from global supply chain disruptions, which we’ve been seeing over the last almost a year now,” Goenka said.

He noted that businesses have faced repeated global disruptions over the past several quarters, with new crises emerging in different parts of the world.

“The way I look at it is with every adversity comes an opportunity,” he said. “If you’re thinking the next three months, you may think of it negatively. But if you’re looking at it as a nine-to-12-month journey, we will come out much, much stronger.”

He echoed Vats' sentiment, saying it's a little bit of pain, for tomorrow's gain. 

Nikhil Sharma, MD at Perfetti Van Melle India (produces global brands like Mentos, Chupa Chups, and Alpenliebe) said companies selling at mass price points are used to navigating volatile cycles and are currently avoiding passing on higher costs to consumers.

“We are not passing on the pain for now, because we have a really good business going on right now,” Sharma said, crediting GST gains.

He pointed to broader pressures building across supply chains, including fertiliser shortages affecting sugarcane crops, which could eventually push up sugar prices for the confectionery industry. Still, Sharma remained optimistic about the broader economy.

“It’s a cyclical thing, and I’m hoping that we get one tough cycle, and then we bounce back, because fundamentals for the Indian economy are very strong,” he said.