Indo-Pak conflict: FMCG sales soar, auto sector hit in border areas in May

Border tensions in May triggered panic FMCG buying and a dip in vehicle, fuel and cinema sales in Rajasthan, Punjab, Gujarat and J&K, with uneven recovery across sectors

The sale of fast-moving consumer goods (FMCG) surged, while the automobile sector saw a dip in May in the border states of Rajasthan, Punjab, Gujarat, and Jammu & Kashmir, as the fear of a potential war between India and Pakistan led to uneven consumer behaviour, according to available industry data and experts.

 

While panic buying triggered a spike of up to 20 per cent in the FMCG segment, sales of automobiles were severely hit in these states, with market leader Maruti Suzuki being the worst-affected. Cinema halls saw a 50 per cent drop in footfall during the month, while fuel outlets too recorded a decline in sales. In the pharmaceutical sector, sales were almost flat in these areas.

 

However, sources reveal that none of the above sectors witnessed any supply concerns despite disruption in logistics due to rising tensions in these states between April 22 and May 10 — the period from the Pahalgam terrorist attack to de-escalation of military action.

 

“During such tense times, people worry if they will be able to get their daily necessities. They generally stock up on items like oil, flour, sugar, among other daily needs items. We witnessed a spike in buying of these items at towns closer to the borders. We saw a spike of 8–10 per cent which then impacts later buying of these products once the situation normalised,” said Angshu Mallick, managing director and chief executive officer at AWL Agri Business (formerly known as Adani Wilmar).

 

Parle Products, which is known for its biscuits, also saw a week of spike in sales of 15–20 per cent. “Consumers resorted to pantry loading during the week of Operation Sindoor which then normalised,” a company source said.  

 

According to a Shriram Mobility report, freight movement in some parts of the areas along the India-Pakistan border was disrupted due to night-time blackouts during Operation Sindoor, temporarily halting logistics operations.

 

Vehicle sales and rentals in the border states were also impacted. While motor car sales fell by 21 per cent month-on-month (M-o-M) in Jammu & Kashmir, 18 per cent in Rajasthan, and by 13 per cent in Gujarat. Maxi cabs fell by 43 per cent in Gujarat, by 50 per cent in Jammu & Kashmir, and by 20 per cent in Rajasthan, the Shriram report added.

 

“Operation Sindoor caused a minor blip in business activities, both in terms of goods movements and vehicle sales in border states, but it has since returned to normal,” said Y S Chakravarti, chief executive officer and managing director, Shriram Finance.

 

In the passenger vehicle segment, market leader Maruti Suzuki has a 55 per cent market share in these four states.

 

“I would also like to highlight the recent military action along the borders of J&K, Punjab, Rajasthan, and Gujarat. These are markets where we enjoy very high market share. All these markets contribute close to 22 per cent of our sales, and the cities which were impacted — almost 9 per cent of our sales come from this market,” said Partho Banerjee, head of sales and marketing at Maruti Suzuki. The company witnessed a 5 per cent dip in its total domestic sales to 148,858 units in May.

 

Commenting on the impact of border tensions on the pharmaceutical sector, Sheetal Sapale, vice-president (commercial) at market research firm Pharmarack, noted that while border states experienced a slight stagnation in sales in May compared to April, historical data shows that a minor dip during this period is typically observed.

 

According to Pharmarack data, the grouping of northern states, including Punjab, Chandigarh, Jammu and Kashmir, and Himachal Pradesh, saw a 1 per cent rise in sales for May 2025 at ₹825 crore from ₹818 crore a month ago. On the other hand, border states such as Rajasthan and Gujarat witnessed a slight drop in sales figures. While the numbers for Rajasthan were ₹609 crore in May, compared to ₹701 crore in April, Gujarat saw a 2 per cent drop in sales, from ₹877 crore in April to ₹855 crore in May.

 

Sapale added that the border tensions had eased during the final week of May, which coincides with the sales closing period for the pharma industry. “This likely helped prevent any significant disruption in overall sector performance,” she said.

 

Petrol and diesel sales were down by more than half in the region during the month, compared to a normal May. “Our supplies were not affected but sales declined by more than 50 per cent when the crisis was at its peak. Anyway, we don't have any outlets near 20–30 kilometers of our border areas,” said Ajay Bansal, president of the All India Petroleum Dealers Association. 

Mixed bag

  8-20%: Spike in sales for FMCG majors in border states

  Motor car sales fell 21% month-on-month in J&K, 18% in Rajasthan, and 13% in Gujarat

  Maxi cabs demand fell 43% in Gujarat, 50% in J&K, and 20% in Rajasthan

  50%: Drop in footfall in cinema halls