GST Cuts Pave Way for Lower FMCG Prices Next Month
Reduced FMCG prices due to lower GST rates are expected by early next month, despite short-term challenges from existing stock. Godrej Consumer CEO Sudhir Sitapati highlighted the temporary disruptions but forecasts stronger growth ahead and broader consumption impacts from increased disposable income and market adjustments.
- Country:
- India
Economists and industry leaders anticipate reduced prices in the Fast-Moving Consumer Goods (FMCG) sector, effective early to mid-next month. This development follows the Goods and Services Tax (GST) Council's recent decision to slash tariffs from September 22, as explained by Godrej Consumer's Managing Director and CEO, Sudhir Sitapati.
Sitapati acknowledged the short-term disruptions caused by excess stock with higher Maximum Retail Prices (MRPs), emphasizing that consumers will benefit once the new pricing permeates retail markets. This comes even as dealers and companies navigate inventory challenges under the existing MRP regime.
Anticipating a demand boost, Sitapati projected strong growth momentum from Q3 onward, attributing the optimism to increased consumer spending capacity. The GST adjustments are expected to promote spending not only in reduced categories like soaps but across all FMCG product lines.
(With inputs from agencies.)
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