Riding on robust demand from rural India the FMCG sector is likely to post growth of 20 per cent in July-September period this fiscal, up from about 14 per cent in the previous quarter, Assocham said.
Despite the negative impact of scanty rainfall, demand from rural India is likely to remain robust complimented by a healthy rise in demand from urban areas, a study by the chamber said.
"The sector is likely to post growth of 18–20 per cent in the second quarter of the current fiscal...The segment had expanded by 13-14 per cent in the first quarter," it said.
It further added the FMCG market is set to more than double from the present $14.7 billion to $30 billion.
"FMCG sector will witness more than 50 per cent growth in rural and semi-urban India by 2010," Assocham said.
Half of the sales of Hindustan Unilever and Dabur India can be attributed to rural India, it said, adding that Nestle India and GSK Consumer drive 25 per cent sales from rural areas.
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The food segment, which includes processed food and beverages, grew by 17 per cent in Q1.
"In the second quarter of this fiscal, this segment is expected to grow by 19 per cent." it added.