A Study on Economic Growth of India: A Focus on the FMCG Sector

Abstract

The Fast-Moving Consumer Goods (FMCG) sector, holding the rank of the fourth-largest segment in India's economy, exerts considerable influence on both the nation's Gross Domestic Product (GDP) and employment landscape. It serves as a key driver of job opportunities across various stages of its supply chain, spanning manufacturing, distribution, retail, and marketing. This paper presents an analysis of the FMCG sector's growth in India, fuelled by consumer-driven expansion and escalated prices, particularly in essential commodities. As of December 2022, the FMCG market has achieved a noteworthy value of US$ 56.8 billion. Forecasts indicate a robust upward trajectory, with total revenue projected to soar at a Compound Annual Growth Rate (CAGR) of 27.9% from 2021 to 2027, reaching an estimated US$ 615.87 billion. In 2022, the urban segment accounted for 65% of the sector's contributions, while rural areas comprised over 35% of the overall annual FMCG sales. Factors such as favourable harvests and government spending are expected to be instrumental in revitalizing rural demand in the fiscal year 2024. Overall the Fast-Moving Consumer Goods (FMCG) industry emerges as a dynamic and essential component of the global economy, making substantial contributions to both revenue generation and employment creation.