The overall fast moving consumer goods (FMCG) market is expected to increase at a compound annual growth rate (CAGR) of 14.7 per cent to touch US$ 110.4 billion in the period 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7 per cent to US$ 100 billion during 2012-2025.
The market size of the Indian FMCG sector is expected to reach US$ 135 billion by 2020 from US$ 44.9 billion in 2013. It is also the fourth largest sector in the Indian economy and has grown at an annual average of about 11 per cent over the last decade. Food products, the leading market segment with 43 per cent of the overall market revenue together with personal care at 22 per cent make up two-thirds of the sector's revenue.
The Government of India's policies and regulatory frameworks such as relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand retail are some of the major growth drivers in this sector. The government has also amended the Sugarcane Control Order, 1966, and replaced the Statutory Minimum Price (SMP) of sugarcane with Fair and Remunerative Price (FRP) and the State Advised Price (SAP).
There is a lot of scope for growth in the FMCG sector from rural markets with consumption expected to grow in these areas as penetration of brands increases. Also, with rising per capita income, which is projected to expand at a CAGR of 7.4 per cent over the period 2013-19, the FMCG sector is anticipated to witness some major growth.