GST Rate Cuts To Bolster FMCG Sector; Daily Goods To Get Cheaper FMCG companies such as Marico, Emami, GCPL, Zydus Wellness, are prioritizing to pass on the GST benefits to consumers at the earliest
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The new goods and services tax (GST) regime, with 5 per cent and 18 per cent slabs, will provide relief to the fast-moving consumer goods (FMCG) industry. The revised rates will come into effect on September 22, 2025. Everyday essentials such as soaps, toothbrushes, hair oil, snacks, chocolates and instant coffee will now attract 5 per cent GST. FMCG companies welcomed the move, hailing it as an important step aimed at driving India towards a consumer-friendly economy.
"The government's proactive step to reduce GST is a game-changing move that will significantly boost consumption across rural and urban India. GST rate cuts, coupled with income tax relaxations, lower repo rates and a good monsoon, create a powerful ecosystem to drive growth," said Harsha Vardhan Agarwal, vice chairman & MD – Emami Limited.
For FMCG major, Emami, the priority now is to pass on the GST benefits to consumers at the earliest. "These benefits translate into greater value for them. This decisive move by the government has the potential to spur consumption across all segments in the country."
By making essential consumer products more affordable, especially in the run-up to the festive season, these reforms will play a pivotal role in stimulating economic momentum and building long-term growth in the FMCG sector. "We believe this will further empower households, foster consumption-led growth, and will act as a catalyst for inclusive economic growth. Here's to nurturing India's consumption story with game-changing reforms that deliver for Bharat!," said Saugata Gupta, MD & CEO, Marico Limited.
Godrej Consumer Products Limited (GCPL) too is optimistic about the reforms, "We welcome the government's initiative of lowering taxes to boost consumption. This move will ultimately contribute to overall economic momentum. GCPL is fully committed to ensuring that the GST rate reduction benefits are passed on to consumers," said Aasif Malbari, chief financial officer, GCPL.
The FMCG sector's resilience is tied to consumer sentiment, and these measures provide the catalytic boost needed to sustain that resilience. It also lays the foundation for sustained consumer confidence by directly addressing inflationary pressures, making daily essentials more affordable, and increasing household disposable income.
Urban consumers, who represent 30 per cent of the population but account for nearly 70 per cent of packaged goods consumption, will particularly feel this positive impact. Yet the broader impact lies in how this policy could reshape demand patterns over the next 12–18 months.
For Zydus Wellness, as a company focused on personal care and wellness products, the reduction in GST is a greater value passed to its consumers. This move will enable the company to expand categories, and ultimately drive higher volumes. "We are optimistic that this catalytic move will help us grow responsibly while contributing to the larger goal of inclusive economic development, " said Tarun Arora, CEO & wholetime director, Zydus Wellness.
"The industry can expect three shifts: greater rural penetration as affordability improves, faster adoption of digital-first consumption models, and an acceleration of wellness-focused choices as families prioritize nutrition, preventive health, and self-care. For MSMEs and regional businesses, a more rationalized tax structure provides fertile ground to scale and innovate, further democratizing growth. Importantly, this simplification of the tax structure also enhances the ease of doing business, benefiting both domestic enterprises and international entities looking to expand in India," added Arora.
