India’s consumer goods makers have stepped into FY27 with a familiar worry — rising input costs — as the conflict in West Asia disrupts supply chains and drives up crude prices. After a brief period of stability, inflation in key raw materials — along with higher packaging and freight costs and a weaker rupee — is squeezing margins, even as demand recovery remains uneven.
“Input cost inflation is back on the radar after months of being benign. Companies may navigate these challenges by taking indirect price hikes through grammage reduction in small packs, while large packs may see direct price hikes,” said Tarun Arora, CEO and whole-time director, Zydus Wellness.
Durable goods companies are set to raise prices across categories — including home appliances and TVs — by 7–10% from April 1, according to top executives, to tide over inflationary pressures that have grown since the West Asia war began on February 28.
“This will be the second hike in cooling products within months, following a price increase of about 5–7% in January due to the implementation of revised energy efficiency norms. Two price hikes in quick succession could hurt demand. We are hoping for heatwave conditions to persist through April–May to keep demand stable during the peak summer season,” said Kamal Nandi, business head and executive vice-president, appliances business, Godrej Enterprises Group.
FMCG companies, meanwhile, are expected to stagger price increases, starting with a 3-4% hike in April across daily-use items to offset rising input costs. Another round of similar increases (3–4%) may follow in May if the conflict persists, executives said.
But not all of the input cost inflation triggered by the West Asia conflict will be passed on to consumers, analysts at Motilal Oswal noted, citing the high price sensitivity of Indian consumers. Companies are also expected to shift away from volume-led growth — at least in the first half of FY27 — and rely more on price-led growth to sustain revenues.
“Demand conditions were beginning to improve, especially in urban areas, following the GST 2.0 reforms initiated in September. We are now going back to the drawing board to assess the implications of West Asia conflict on our business. There is a sense of caution among FMCG companies,” said Mohit Malhotra, global CEO, Dabur.
While the full impact of the conflict is expected to be visible in Q1 of FY27 for FMCG firms, experts said some effects were already evident in Q4 of FY26. For instance, FMCG value growth in March declined by about 1–2%, according to industry executives citing Bizom data.
Urban FMCG value growth, in particular, saw a sharper contraction of around 4–5% in March, while rural growth slowed by 2–3%, sources said. This comes amid rising uncertainty, prompting consumers to prioritise essential categories such as food while cutting back on discretionary spending, including personal care.
In January and February 2026, FMCG value growth stood at 5.7% and 5.5%, respectively, according to Bizom data. While urban markets showed signs of slowing during this period, rural growth remained relatively stable, supported by government spending programmes, the data indicated.