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Ravi Kabra, co-founder of Skippi, highlighted several challenges faced by the FMCG sector that need attention.
“I believe the upcoming Budget has immense potential to catalyze growth and innovation in India’s FMCG sector. Our industry faces several challenges that require thoughtful policy interventions to overcome. First, the current GST structure imposes significant burdens, particularly on essential FMCG products, particularly through potential reductions in GST rates for essential products currently burdened by a high 18% tax. Infrastructure development, especially for cold chain and warehousing facilities, is crucial to accommodate growth in beverages and frozen products. The emphasis on research and development, encouraging innovation in eco-friendly packaging and natural ingredients, is aimed at improving consumer health and industry expansion. Investments in digitization are expected to improve e-commerce infrastructure, benefiting small and medium-sized retailers with tax incentives and promoting accessibility to the rural market. Efforts to streamline GST processes, simplify licensing and enhance export facilitation underscore a proactive approach to supporting FMCG startups and established brands. Overall, the budget aims to ease financial pressures, stimulate innovation, and strengthen market competitiveness through strategic fiscal policies and infrastructure improvements. Creating cluster programs would streamline operations for manufacturers of fast-moving consumer goods by allowing a hub with subsidized resources (such as energy and land) to develop a specific category of products.
“Furthermore, business comfort can be increased by making it simpler for people to obtain finance through banks and NBFCs at cheaper and subsidised rates. Such steps would be extremely helpful in promoting growth and sustainability in the FMCG industry, given the competitive edges in the industry,” he said.