Everyday products are set to get even more costlier. Companies are facing rising raw material costs and this is likely to lead to more price hikes as well as smaller product sizes as per a Systematix Research report.
Food, beverage, home, and personal care products are likely to be affected. As per the report, this price rise is expected in coming months.
Despite recent retail prices spiking around 3-7 percent, FMCG firms are still struggling to offset the raw material cost rise which is around 8-10 percent. The Systematix report expects gross margin pressures to further impact the size of products and the inflation trend to persist for the sector.
Analysts believe this adds to stagflation risks as elevated inflation along with easing economic growth and geopolitical uncertainty will not only depress volume growth, slow consumer spending but could also result in a period of stagflation.
Economist and Founder, Nikore Associates, Mitali Nikore says, "this is a classic cost pass-through story. Fuel prices feed directly into logistics and freight costs, which then travel up the supply chain into raw material prices, and ultimately land on the consumer’s shelf. With Brent crude surging nearly 50% since February and India importing over 80% of its crude, that transmission is happening fast. FMCG firms are already absorbing raw material cost increases of 8–10% while managing retail price hikes of only 3–7% — the gap has to close somewhere, either through further price increases or shrinkflation. Either way, it is ordinary households, particularly lower-income ones where food and daily essentials dominate the budget, who bear the final burden.”
India’s wholesale inflation surged to 8.3 percent in April 2026 as against 3.88 percent in March. This marks a 42-month high as the spike in input costs and producer prices due to rising global energy and commodity costs amid the West Asia conflict led to this spike. India’s current retail inflation is at 3.48% for April 2026 and food inflation at 4.20%.
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