India’s fast-moving consumer goods (FMCG) market reported its slowest volume growth in seven quarters in the October-December 2025 period, NielsenIQ data released Thursday shows, standing at 2.6%, due to GST transition issues as well as a high festive base. A year ago, volume growth stood at 6.2%, while in the September quarter, volume growth was 5.5%. Overall, the domestic FMCG market grew 7.8% in terms of value in the December quarter, its slowest in five quarters. A year ago, value growth stood at 10.1%; sequentially, it was 13%, data from the market researcher shows.
Also, the gap between urban and rural volume growth is narrowing as metro markets see a recovery in consumption and a normalisation in e-commerce demand, NielsenIQ said. In the December quarter, urban volume growth stood at 2.3%, while rural volume growth was 2.9%, its lowest in five quarters.
“While initial supply and pricing adjustments led to moderated consumption in the December quarter, organised channels responded faster to structural changes. We expect the positive impact of GST 2.0 on consumption to become more visible from the March 2026 quarter onwards,” Sharang Pant, head of customer success, FMCG and Tech & Durables, NielsenIQ in India, said.
Retail Pivot
Traditional trade, NielsenIQ said, was the hardest hit in the December quarter, due to supply and pricing recalibrations during the GST 2.0 implementation. But recent data, the market researcher said, suggested stabilisation following the GST transition. Traditional trade contributes 89% to FMCG sales; modern trade contributes 11% to FMCG sales.
In the December quarter, traditional trade slumped to levels of 1.1% in terms of volume growth versus 7.2% reported a year ago and 5.6% seen sequentially. Modern trade saw a sharp upswing at 15.5% in the December quarter versus a decline of 1.8% reported a year ago and 5.3% seen in the September quarter, which is a three-fold growth, NielsenIQ said.
Category and Channel Trends
E-commerce sales, on the other hand, strengthened in the December quarter, constituting 6% of urban FMCG sales (it was 5% earlier). Quick commerce remains the fastest-growing channel within e-commerce, accounting for over three-fourth of e-commerce FMCG sales.
Food consumption benefited from GST-driven price corrections and stabilisation in edible oil prices, helping it outperform home and personal care (HPC) in consumption growth in the December quarter. HPC recorded 1.9% volume growth to food’s 2.8% in the quarter under review, reflecting sharper moderation in the former, NielsenIQ said. Food constitutes 61% of the FMCG consumption basket to HPC’s 32% and over-the-counter products’s 7% share. The latter saw a consumption growth of 3.2% in the December quarter, outperforming food and HPC, on a smaller base, experts said.
Regionally, southern metros have surpassed 21% e-commerce share, while northern and eastern metros are narrowing the gap with modern trade. Western markets continue to see modern trade leadership, though e-commerce is steadily gaining share from traditional trade, the research agency said.