India’s consumer products industry had a 9% increase in value during the July–September quarter as rural consumers’ purchasing power increased. With sales volumes increasing 6.4% from 4% in the June quarter, rural markets continued to show signs of recovery during the quarter.
The volume of the rural market had decreased throughout the last four quarters from 2% to 5%. Rural India has seen a persistent decline in the demand for consumer products as a result of rising costs for basic necessities like milk and wheat flour, which has forced people to cut back on both necessities and discretionary expenditure.
Slower price increases, a drop in unemployment, and the government’s move to slash cooking gas costs, on the other hand, increased consumers’ desire to spend. Retail inflation in India reached a 15-month high in July before declining in August and September. Unemployment fell to 7.1% in September before rising to more than 10% in October. An increase in consumer expenditure on non-essentials such as personal care and home care products implies that rural consumers are beginning to spend on items other than necessities.
While rural markets showed signs of recovery, metropolitan areas maintained a consistent rate of consumer growth. Within the retail sector, modern trade increased by 19.5% during the quarter, while traditional trade increased by 7.5%.