BS EDIT: Is India's economy diverging into two paths?

By Business StandardPublished On Oct 29, 2024

FMCGs raise alarms

Recent FMCG leaders' remarks suggest India's economy may be diverging, with shifting demand patterns hinting at two distinct economic paths

Demand weakness

Earnings calls show declining demand but steady growth in premium sales, hinting at a deepening economic divide and a “K-shaped” recovery for India

A complex ''two Indias''

The divergence lies not between urban and rural, but between high-income consumers buying premium goods and lower-income groups facing stagnant demand

Shifting dynamics in demand

Rural demand is recovering with a stable monsoon, while urban demand, especially in metros, lags, challenging assumptions that urban growth is self-sustaining

Middle-class erosion

An FMCG leader warns of a shrinking middle class in India; as the elite buy premium goods, middle-income stagnation threatens sustainable, balanced growth

Flaw in growth engine?

Experts suggest urban demand may have relied on fading government stimulus; deeper data on urban poverty is needed to gauge real prosperity and hardship levels