India's consumption slowdown: A temporary dip or deeper concern?

Stagnating wages, derivative losses, and rising debt burdens-India's consumption story grapples with multiple challenges

In recent weeks, a slowdown in private consumption has dominated headlines. At a time when concrete signs of a revival in private capex cycle are yet to emerge, this is worrying. However, it is important to understand the factors underpinning the consumption slowdown for its proper diagnosis.

 

In Q2 of 2024-25, the sales growth of top 10 fast-moving consumer goods (FMCG) companies by market capitalisation slowed to 4.3 per cent from 6.1 per cent in the previous quarter, raising serious concerns about weakening urban consumption. This was later confirmed by a slowdown in private final consumption expenditure (PFCE), which grew