In parts of western and eastern India, it is down by high single digits, as price increases by companies over the past few months, amid higher inflation, have weighed on demand. 

In central and northern India, meanwhile, demand is growing, particularly for packaged foods, according to distributors.

Those in the supply chain say the picture could still change as a fortnight remains before Diwali, and demand could pick up. But price increases have affected consumer spending Demand is weakest in the east. A distributor there said it was down 7-8 per cent from last year’s Diwali season and significantly lower than in 2024. 

In the west, a sharp difference between urban and rural markets is palpable. A distributor said urban demand was holding up, while rural markets had started showing signs of weakness. 

“Price increases and crop damage have had an impact on demand in rural India. We have seen demand weaken in towns in regions such as Vidarbha,” he said. 

While the value of urban sales in the region had risen 7-8 per cent following price hikes, volumes remained flat and were now edging into negative territory, he said, adding that company promotions may help. 

“Companies will announce schemes ahead of Diwali, so that could boost sales over the next 15-20 days,” the distributor said.

Mumbai is an exception. A distributor in the city, supplying both modern and general trade, said modern-trade sales were up 25-30 per cent, while general trade was holding steady. “We have witnessed strong stocking of FMCG products ahead of Diwali this year. In Mumbai, we are not seeing a slowdown in demand across products, including chocolates,” he said. 

Growth is strongest in central India, and parts of Uttar Pradesh and Bihar, where demand for packaged foods is rising at high single-digit to mid-double-digit rates. “Demand is growing well, especially for edible oils. In the central region, we are seeing an increase of 15-18 per cent. In Uttar Pradesh, demand is higher by 7-8 per cent, while Bihar is witnessing growth of more than 15 per cent,” a distributor from the region said. 

Personal care performance is weak. “While retailers are stocking up to a certain extent, tertiary demand is weak,” the same distributor said. He attributed this to increased competition and to consumers shifting their purchases of personal care products to e-commerce and quick-commerce platforms. 

A company executive, who spoke on condition of anonymity, said regular demand for packaged foods remained stable, but the impact of Diwali-related purchases would become clearer only towards the end of October and in the first week of November. “Earlier, stocking would begin a fortnight in advance. Now, the market starts stocking up closer to the festival season. The real indicator of demand will be seen then,” the executive said.

Companies are optimistic 

Company comments are so far measured. Nestlé India, in its results release on October 15, underscored rising inflation, particularly food inflation. “We remain focused on navigating these external challenges through continuous innovation and renovation, sustained investments behind our brands, and an intensified focus on productivity and operational efficiencies to mitigate commodity cost pressures,” stated Manish Tiwary, chairman and managing director. 

Dabur India, in its pre-quarterly update ahead of its Q2FY27 results, said it remained optimistic about further acceleration in consumption, supported by the festival season, while continuing to monitor the evolving geopolitical and inflationary environment. Marico, in its update ahead of its July-September results, said: “Looking ahead, we remain optimistic on consumption trends, while closely monitoring the evolving inflationary conditions.” 

Godrej Consumer Products, in its pre-quarterly update, said it expected another strong quarter in Q2FY27 despite consumption being affected by uneven monsoon conditions, led by an intensifying El Niño, and by inflationary pressure across several commodity-linked inputs. It added that the comparator for the quarter was supportive.