FMCG inflation stays firm as price fell for autos & electronics
Inflation in fast-moving consumer goods (FMCG) showed little change in September even as retail inflation for automobiles and electronic items fell sharply following the GST rate rationalisation late in the month, data from the Consumer Affairs Ministry showed.
Effective September 22, the GST Council’s rate cuts reduced levies on a range of goods — from 28 per cent to 18 per cent for small cars, motorcycles (up to 350cc), air conditioners, and 32-inch televisions, and from 12 per cent or 18 per cent to 5 per cent for household essentials such as hair oil, toothpaste, soaps, shampoos, biscuits, and butter.
Despite the late implementation, the impact was visible in the automobile segment; inflation for motor cars and jeeps dropped to 1.62 per cent in September from 3.78 per cent in August, while that for motorcycles and scooters eased to 2.72 per cent from 3.83 per cent. Electronic items such as air-conditioners and televisions also recorded declines, with inflation for ACs down to 0.27 per cent and TVs slipping into deflation of around 2 per cent.
By contrast, FMCG items such as toothpaste and shampoo have yet to reflect price moderation. Analysts attributed this to slower pass-through of tax benefits due to inventory and input cost factors.
According to QuantEco Research, the automobile sector has led the way in implementing GST cuts ahead of the festive season, with a potential disinflationary impact of about 130 basis points on CPI inflation on an annualised basis, though the effective pass-through is likely around 60 bps, spread over FY26–FY27.
Rajni Sinha, Chief Economist at Care Edge said that rationalisation of GST rates is further expected to have a positive impact on the overall inflationary environment.
“We estimate that it could lower CPI inflation by 70–90 bps annually under the current basket, assuming effective pass-through to consumers,” she said.
Echoing the sentiment, Garima Kapoor, Economist with Elara Securities said: “We see 20-30bps downside risk to average inflation for FY26E amid GST rate rationalization and benign food prices and revise our FY26E CPI to 2.5 per cent from 2.7 per cent earlier.”
Meanwhile, Radhika Rao, Senior Economist at DBS Bank, said disinflationary impulse from indirect tax relaxation on most goods categories is likely to be more material in the October print, as changes took effect in late September.
Published on October 14, 2025
