The consumer behaviour is also experiencing a transition with trends like online shopping, he said at an event organised by FICCI. With consumer awareness improving dumping of cheap goods from neighbouring countries is slowing down, he added.
"The Indian retail market is poised to reach USD 1.3 trillion by 2020 and therefore it will provide a tremendous growth opportunity for retail and FMCG players alike," Thomas said, a week after government relaxed foreign direct investment (FDI) norms in multi-brand retail.
The Indian FMCG industry is growing at 11 per cent annually. The current retail market size is USD 500 billion.
Thomas said they have "a responsibility" to keep consumer confidence by providing quality goods and services at affordable prices.
"....I would expect the Indian industry to live up to the expectations of people who look up to you for goods and services at price they can afford," he said, adding that the industry should serve consumers in such a manner that the regulators' activities become redundant.
The minister said a high-level committee on internal trade reforms has been set up to see how laws could be streamlined to ensure vibrant market is in place for all stakeholders.
Last week, the government relaxed foreign direct investment (FDI) norms in multi-brand retail. It diluted mandatory 30 per cent local sourcing norms for multi-brand retailers and permitted states to include cities with population less than 1 million for allowing such retailing.
Emphasising that India's huge consumer base of more than one billion is an opportunity for the FMCG sector, Thomas said the industry should take advantage of this and invent new products with superior technical prowess and intelligence.
At present, global players are taking benefit of this situation. They are shifting to India to manufacture their goods as the country has cheap labour and the big market to exploit, he said.
He also mentioned that the domestic industry should "seriously" take into account huge decline in the number of families living below poverty line (BPL).
Consumer Affairs Secretary Pankaj Agrawala said, "We are moving towards a complex market. Consumers are ill-equipped and we have to play a proactive role."
To protect consumers from unfair trade practices, he said an inter-ministerial panel will soon be set up to discuss how the government can take sue motto notice of grievances of consumers and take actions accordingly.