Rural Surge: India's FMCG Boom in the Hinterlands

Rural India continues to outpace urban markets with an 8.4% growth in FMCG volumes in Q2 2025, as per NielsenIQ. Urban areas show signs of recovery, driven by smaller towns. E-commerce maintains robust growth, contributing significantly to omnichannel expansion, while small manufacturers outperform larger players supported by rural demand.

The Fast-Moving Consumer Goods (FMCG) sector in India witnessed an interesting shift during the June quarter of 2025. According to a recent report by NielsenIQ, rural regions surged ahead with an 8.4% volume growth, surpassing urban counterparts that recorded a growth of only 4.6%.

This marks the sixth consecutive quarter of rural dominance, though the gap is gradually closing due to urban regions showing signs of sequential recovery, particularly in smaller towns. Despite metropolitan areas lagging, urban markets are beginning to see a slow but steady resurgence.

E-commerce stands out as a significant driver of growth, especially in southern metros where it has captured an 18.4% market share. While small manufacturers lead in consumption growth, driven by rural demand and easing inflation, large players maintain stable performance, setting a vibrant stage for the sector's development.

(With inputs from agencies.)