FMCG companies in India are advised to implement contingency-led supply-chain planning, portfolio consolidation, and revenue growth management to mitigate risks stemming from the US-Iran war, according to a report by EY India. The report also recommends sharper resource allocation, localisation, and backward integration across value chains to address challenges in the consumer products and retail sector. Sectors heavily reliant on oil, petrochemicals, and global shipping, such as edible oils, textiles, paints, packaged foods, and personal care, are already experiencing cost shocks and pricing dilemmas.
Rising crude oil and derivatives prices, along with supply-chain constraints, are expected to have widespread impacts across various sectors, potentially affecting the industry’s profitability. The surge in packaging and transportation costs, coupled with a weakening currency leading to increased import costs, is further exacerbating the situation. Additionally, supply chain disruptions are driving up commodity prices, freight costs, and price volatility, posing significant challenges to the industry.
The report highlights edible oil inflation as a major concern, with India importing approximately 57% of its edible oil requirements and retail edible oil inflation surpassing 7% in early 2026. FMCG companies that rely on palm oil, such as those in the snacks, bakery, and packaged foods segments, are facing margin pressures due to these inflationary trends.
FMCG companies specializing in personal care products are encountering shortages and price spikes in inputs, particularly petrochemical derivatives. Shortages and significant price increases in inputs like silicone oil and ammonia are impacting niche segments such as condoms and medical personal care products, where quality standards and substitutes are limited. The report predicts that brands are likely to delay new product launches and prioritize core Stock Keeping Units (SKUs) to ensure volume stability and margin protection rather than expanding their product portfolios.
Paint companies are contemplating price increases of 2–5% if crude prices remain high into FY27. However, intense competition within the sector may delay aggressive price adjustments for consumers.
