FMCG stocks surge as GST Council cuts tax rates on essentials

FMCG shares surged on Thursday after the GST Council approved a sweeping tax rationalisation that slashes rates on a wide range of everyday essentials.

The Nifty FMCG index gained 1.66% to close at 57,916.95, outperforming the Nifty 50 which advanced 0.73% to 24,896.10. Among key movers, Britannia Industries jumped 5.66%, Colgate-Palmolive (India) rose 5.07%, Dabur India added 4.16%, Emami climbed 3.68%, Nestle India gained 2.24%, ITC advanced 1.86%, Hindustan Unilever was up 1.52%, Marico rose 1.19% and Patanjali Foods added 0.58%.

The GST Council, in its 56th meeting chaired by Finance Minister Nirmala Sitharaman, announced that several fast-moving consumer goods currently taxed at 12% or 18% will now fall under the 5% bracket. The revised rates take effect from September 22, 2025.

 

The move, aligned with Prime Minister Narendra Modis Independence Day address outlining a citizen-centric tax framework, is aimed at simplifying Indias indirect tax structure while spurring household consumption. The Council clarified that nearly all products previously under the 12% or 28% brackets will now shift to the 5% or 18% slabs.

Market participants welcomed the reforms, calling them a structural reset that could expand demand and strengthen the consumption story in India's FMCG sector.

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