India's consumption story gets a facelift as rural demand shows promise

FMCG companies have also witnessed a pick-up in rural areas.

Consumer goods firms and auto companies are witnessing an upturn in rural demand, which had been lagging for most of FY24. Expectations of a bumper rabi crop harvest have helped turn the tide.

The Reserve Bank of India’s (RBI’s) Monetary Policy Committee kept the repo rate unchanged last week, noting that as rural demand catches up, consumption is expected to support economic growth in 2024-25. “Rural demand, which was lagging urban demand earlier, picked up since Q2 2023-24. This is also suggested by the performance of indicators, such as two-wheeler sales (30.3 per cent Y-o-Y growth during January-February), MGNREGA demand (9.8