As tensions in West Asia ripple through global markets, India’s fast-moving consumer goods companies are beginning to see the first signs of stress in their international businesses. The impact, for now, remains contained. At home, demand is holding steady, giving companies the confidence to stay the course into FY27.

Gulf business under strain

The pressure is most visible in the Middle East, where companies are reporting early signs of disruption. Dabur India said in its Q4FY26 internal unaudited report that heightened geopolitical tensions in the region led to demand slowdown and supply chain constraints in the March quarter, dragging its international business to low single-digit growth in rupee terms. This comes even as markets such as Turkey, Bangladesh and the UK continue to deliver double-digit constant currency growth.

Marico, too, pointed to a similar trend. Its international business posted high-teen growth overall, but the Gulf region remained an outlier due to geopolitical headwinds in March. The pattern suggests that the current conflict is creating region-specific stress rather than a widespread global slowdown.

Brokerage firm Motilal Oswal Financial Services noted that geopolitical tensions have impacted most staple companies on the international front, with a sharper effect in the Middle East. “Companies such as Dabur and Emami will be more affected at the consolidated level due to issues in the MENA region,” said Naveen Trivedi, research analyst, highlighting that the region contributes roughly 6% to 8% of revenues for some players.

Despite these headwinds, the impact remains contained for now, with diversified portfolios helping companies offset regional weakness.

For Godrej Consumer Products’ Africa, US and Middle East business continued to deliver double-digit sales growth with high single-digit volume growth, pointing to the benefits of a diversified international portfolio.

Domestic demand holds firm

Back home, the picture is far more stable. Companies reported steady demand conditions through the March quarter, with signs of sequential improvement in consumption.

Dabur expects its India FMCG business to post high single-digit growth, led by mid-teens expansion in home and personal care. Categories such as hair oils, shampoos and home care are likely to grow in the twenties, while core brands including Dabur Amla, Vatika and Odonil continue to gain market share.

Marico reported high single-digit volume growth in its India business, with value-added hair oils expanding in the twenties and foods delivering high-teen growth. Godrej Consumer Products expects double-digit underlying sales growth and high single-digit volume growth in its standalone business, with broad-based momentum across categories. Excluding soaps, volumes remain in double digits.

Staples and food categories are also holding up well. AWL Agri Business reported 17% volume growth in edible oils and over 30% growth in parts of its food portfolio, supported by distribution gains. The company expanded its general trade presence to over 965,000 outlets, adding nearly 120,000 outlets during the year, with rural markets driving much of the expansion.

According to Motilal Oswal, rural demand remains resilient while urban consumption is also showing an improving trajectory. The brokerage expects staples companies to report year-on-year improvement in domestic revenue growth for the quarter, with the food category continuing to outperform beauty and personal care.

Inflation risks temper outlook

Even as demand holds, near-term risks are building. A late-quarter rise in crude and vegetable oil prices is expected to push input costs higher into the first half of FY27. Godrej Consumer has indicated a potential cost impact of 6% to 9% if current levels sustain.

Companies have already taken marginal price hikes of around 2% in March and are preparing for further increases to offset raw material inflation. Motilal Oswal expects margins to remain healthy in the March quarter, but flagged that trends could reverse in the June quarter as inflationary pressures build. “We expect the inflationary pressure to increase, and this may result in lower spending,” Trivedi said, adding that companies with higher exposure to the Middle East will be more affected than others.

For now, the overall tone remains measured. The March quarter began on an optimistic note, with January and February seeing sequential improvement in demand, supported by stable commodity prices and festive spending. As a result, the immediate impact of geopolitical tensions on revenues and margins has been limited.

Companies are entering FY27 with cautious optimism, banking on steady domestic demand, pricing power and cost controls to navigate volatility.