Winning Bizness Desk

Mumbai.Rising prices of soap, biscuits, cooking oil and packaged daily-use products may soon put extra pressure on household budgets across India. Major FMCG companies, including Dabur India, Hindustan Unilever and Nestlé India, have indicated that product prices could rise further in the coming months due to increasing raw material and packaging costs.

Companies say the sharp rise in expenses is being driven by global instability, especially tensions in the Middle East, which have pushed up crude oil-linked costs. Since packaging materials, transportation and chemicals are directly linked to petroleum prices, the impact is slowly reaching consumer goods sold in shops and supermarkets. Industry experts believe this fresh round of inflation could affect almost every Indian household.

Fresh price hikes likely in coming quarter

According to Dabur India Global CEO Mohit Malhotra, the company may increase prices again during the first quarter of FY 2026-27, covering the April-to-June period. Dabur had already increased prices by nearly 4% in the current quarter, but officials say input costs are continuing to rise steadily.

Despite reporting a 15.75% year-on-year rise in consolidated net profit during the fourth quarter of FY26, the company admitted inflationary pressure remains a major challenge. FMCG firms are now trying to balance consumer demand with rising operational costs.

Key reasons behind expected price rise:

• Costlier packaging materials
• Increase in edible oil and milk prices
• Higher transportation expenses
• Rising crude oil-linked chemical costs
• Global supply chain uncertainty

Middle-East tensions raise industry concerns

The biggest worry for FMCG companies currently is the growing instability in West Asia. The recent exchange of fire involving Iran and the United States has triggered fears over global energy supply disruptions and crude oil volatility.

If crude oil prices continue to rise, companies may face a fresh jump in fuel and logistics expenses. This could eventually increase manufacturing and delivery costs for products used in daily life.

Industry insiders say the situation may worsen if geopolitical tensions continue for a longer period. Petrol and diesel prices could also rise, indirectly affecting supply chains across sectors.

What consumers may experience:

• Smaller product packs at same prices
• Increase in MRP of essential goods
• Higher monthly grocery bills
• Rising transport-related service costs

Demand returns in villages and small towns

One positive trend for the industry has been the recovery in rural demand. Quarterly earnings showed improved volume growth from villages and smaller towns after a long slowdown. Companies had expected this recovery to strengthen sales momentum across categories.

However, just as consumption started improving, firms were hit by another wave of raw material inflation. Prices of edible oils, dairy products and packaging inputs have started climbing again, squeezing company margins.

Executives say this has created a difficult situation where demand is increasing but profits are under pressure. FMCG firms now face the challenge of protecting margins without hurting consumer sentiment.

Apart from Dabur, several major companies including Marico, ITC Limited, Britannia Industries and Godrej Consumer Products have also signalled concerns about rising costs and uncertain global conditions.

Market experts say a weak monsoon could further worsen inflationary pressure. If weather conditions affect agricultural output and global tensions remain unresolved, Indian households may see a noticeable jump in monthly expenses over the next few quarters.

There are also growing concerns over possible disruption in the Strait of Hormuz shipping route, a crucial passage for global oil movement. Though the full economic impact was not visible in the previous quarter, companies say supply chain pressure is now becoming clearer.

Freight costs have already increased in many sectors. For the FMCG industry, this has become a double burden — rising demand on one side and uncontrollable costs on the other.