Consumer industry captains seek more tax cuts to support demand

MUMBAI: Chiefs of India's consumer companies are seeking more tax cuts, wider measures to put money in the hands of the middle-class and support consumption, which has begun to look up after months of sluggishness but runs the risk of being buffeted by external macro factors.

CEOs are also pinning hopes on the Budget to provide for measures to shield local industries against volatile commodity prices. "The Budget can support recovery in consumption by strengthening purchasing power, particularly in price-sensitive urban and rural markets. At the same time, allocate budget and take initiatives to improve agri/farm sector to ensure steady input prices which can help FMCG companies manage costs without passing them on to consumers," said Mayank Shah, vice-president at Parle Products.

There should be a focus on increasing disposable incomes and supporting middle-class first-time buyers of consumer durables, a sector where consumption has been hit by adverse commodity costs and currency depreciation (import costs go up when rupee weakens), said Kamal Nandi, business head and EVP at appliances business of Godrej Enterprises Group. "Additionally, measures that help ease cost pressures - such as stable import duties on essential raw materials and support for domestic manufacturing will allow companies to avoid passing the full benefit of cost inflation to consumers," Nandi said.

There are a few large, mass-consumption FMCG categories, especially in home care that continue to be taxed at 18% and could move to a lower slab such as 5% to aid demand, said Sudhir Sitapati, MD & CEO at Godrej Consumer Products.

The industry is also looking for meaningful support to manage input-cost volatility, particularly in categories impacted by inverted duty structures under GST which lock up working capital and add to cost pressures for manufacturers, added Prashant Peres, GM, India at Mars Snacking. "Budget 2026 should focus on tariff rationalisation and accelerated infrastructure investments to strengthen the momentum on broad based growth," said Sudhanshu Vats, MD, Pidilite Industries.