After months of slowdown, consumer demand rebounds in Oct–Dec on GST cuts, softer inflation
Consumer goods demand saw a strong recovery in the October-December quarter, driven by GST cuts and easing inflation. Sales of electronics like ACs and TVs rose significantly, marking the retail market's best growth phase in over 18 months. Retailers remain cautious but inventory levels have decreased.
Kolkata | Mumbai: Demand for consumer goods across electronics, groceries and lifestyle products recovered in the October-December quarter, helped by outsized cuts in goods and services tax (GST), easing inflation and improving sentiment after months of sluggish consumption, data from companies and market trackers showed.
Volume sales of air-conditioners and TVs rose about 7-8% year-on-year after two consecutive quarters of decline following the GST reduction, while refrigerators and washing machines posted 5-6% growth, as per industry estimates. The retail market reported its best phase of growth in more than one and a half years.
Blue Star managing director, B Thiagarajan, said sales picked up after two weak quarters, even as retailers stayed cautious. "This is despite retailers not yet stocking up for summer unlike previous years to ensure their working capital is not blocked. Still, unsold inventory levels have come down significantly," Thiagarajan said.
**Boost from Winter Stocking
**India reduced the applicable GST on most consumption items from September 22 last year in the biggest consumption-tax reforms since the uniform levy was introduced in 2017.
Fast-moving consumer goods (FMCG) companies also reported early signs of revival. Dabur, in an investor update, said demand improved during the quarter, aided by GST revisions.
“In October 2025, distributors and retailers focused on liquidating higher-priced inventory in the channel. After trade stabilisation, consumer sentiment improved across urban and rural markets, with rural demand continuing to outperform urban demand,” the company said.
Retail stocking strengthened as well. Orders at neighbourhood stores rose 6.9% in the December quarter, more than double the 3.1% growth seen a year earlier, according to Bizom, which tracks eight million kirana outlets in the country.
“Strong retail stocking of winter products also helped sales, especially of personal care products, despite broader GST-led disruption,” said Harshit Bora, analytics head, Bizom.
Last week, consumer goods company Marico said volumes grew at a high single-digit rate year-on-year in the December quarter, and it remains optimistic about a gradual improvement in consumption in the quarters ahead, due to easing inflation, lower GST rates, higher minimum support prices, and a healthy crop-sowing season.