MNCs see higher returns in India, outpacing global growth trends: Report

Country's share in global growth 2-8 times its volume share: Report

India is showing a disproportionate contribution to global volume growth for consumer products, with its growth contribution over the past five years (2019–24) outpacing its volume share across categories by 2–8 times compared to last year, making the country a robust growth engine for global consumer product multinational majors.

 

According to a report released on Wednesday by Bain & Company, ‘Playbook for Consumer Products Multinational Corporations in India’, in consumer appliances, for instance, India’s share of global volumes in 2024 was 5 per cent, but its share of global incremental volume growth between 2019 and 2024 was a marked 44 per cent — 8.6 times more than its volume share last year.

 

The same trend is discernible in other categories — in apparel and footwear, the country had 8 per cent of the global volume share in 2024 but a 34 per cent share of global incremental volume growth in this category over the past five years.

 

In hot beverages, India’s global volume share in 2024 might be 6 per cent, but its incremental share over five years was 24 per cent. In the category of snacking, India’s global volume share in 2024 was 10 per cent, but its incremental volume share over the past five years was 2.1 times more, at 22 per cent.

 

Bain also profiled around 42 global consumer product companies with revenues of over $10 billion, of which 30 operate in India — these included fast-moving consumer goods companies but excluded tobacco, agriculture, and food processing companies. 

 

The analysis shows that winning in India can be quite rewarding — for several such companies, their India affiliates delivered disproportionate total shareholder returns (TSR), which were 2–6 times more than their global parents between 2015 and 2024. Not only that, Bain reveals that 60 per cent of consumer product multinational companies (MNCs) in India are growing (in terms of compound annual growth rate between 2018 and 2023) at nearly twice the global growth rate — an opportunity missed for MNCs that are not present in India. For instance, a UK-based consumer products company with a market capitalisation (mcap) in India of $64 billion had a 10-year total shareholder return (2015–2023) of 12 per cent in India, which was 1.8 times higher than its global parent.

 

A European consumer company (with an Indian mcap of $24 billion) had a TSR in the same period in India of 15 per cent, compared to its global parent, which was only one-fifth.

 

In other sectors, a US-based oral care company (mcap in India of $9 billion) saw its TSR 2.4 times higher in India than that of its global parent.

 

A US-based home appliances company (with an mcap in India of $3 billion) recorded a TSR of 11 per cent, which was 12.7 times higher than its global parent. There is more good news — for winning MNCs, India also offers healthy double-digit earnings before interest, tax, depreciation, and amortisation margins, in line with those of their parent MNCs.

 

This is also reflected in the fact that gross margins in India range from 25–30 per cent in savoury snacks to as high as 55–60 per cent in skincare.