The Indian FMCG industry despite a moderate downswing in the second quarter  July September 2010  is optimistic to record higher levels of growth in the current fiscal i e  April March 2010 11 according to the latest CII FMCG survey  The survey covered around 30 fast moving consumer goods  FMCG  items belonging to personal care products  cosmetics and toiletries and household care products  The results are based on the feedback received from the related industry associations and companies in the FMCG industry and interaction with the representatives of various FMCG companies
According to Mr  Chandrajit Banerjee  Director General  CII   FMCG is the sector which has helped the Indian economy to emerge speedily from the impact of the global recession  Though rising food inflation and high input costs have hurt the FMCG sector in the first half of the financial year 2010 11  the industry is optimistic about its performance during the full year  
The Confederation of Indian Industry  CII  has recently undertaken a comprehensive survey of FMCG sectors in order to project the growth rate for the sector for the financial year 2010 11  The CII FMCG survey reveals that India s FMCG sector has registered a growth of 11 4 percent in the first quarter of 2010 11 i e April June 2010 compared to a growth rate of 12 0 percent in 2009 10  During the second quarter  July September 2010  the sector has  however  experienced slight drop in growth rates to 11 0 percent  due to increase in costs of various inputs such as petroleum products and packaging materials  food inflation etc  But the industry  according to the survey  is optimistic to maintain higher growth at 13 0 per cent in the fiscal year April March 2010 11  as commodity prices are expected to cool down on the back of a good monsoon  The festive season spread over the second half of the year would also lead to more consumer spending spurred by the recent hike in the salaries of employees
The sectors which are projected to achieve excellent growth of above 20 per cent during April March 2010 11 over April March 2009 10  in Brackets   are : Deodorant 41 5   40    Anti ageing cream 30 5   30    Tooth paste 22   20    Skin and fairness cream 18   16    Men s Fairness product 32   32    Hair colorants/dies 22   21    Cleaners and repellents 23   22    Feminine hygiene 22   20    Baby diapers 21   20   and Dish wash 27   26  
The categories expected to witness high growth rate of 10 20 percent are detergent powder 16   15    washing cakes 13   13    toilet soaps 16   15    tooth brush 13   13    fairness cream 18   16    men s hair grooming and styling 20   18    branded coconut oil 10   10    shampoos 12   9 8    baby care 17   17   and skincare 15   15  
The categories like toothpowder 1 8   2    Liquid soaps 7   6    Shaving products 8   7    and coconut oil 2   2   are expected to register Moderate growth of 0 to 10 percent
The positive growth drivers mainly pertain to FMCG companies  focused initiatives and strategies including mergers and acquisitions  overseas expansion  new product innovations and launches with smaller packs/ sachets to tap vast niche segment  aggressive rural market penetration to cater to rising rural demand  The growing economic fundamentals with changing lifestyles and preferences for branded products  continuance of the bail out packages more or less with reduced tax incidence  improved incomes and the pay hikes of the government employees  improved standard of living in most tier II and tier III cities  increasing income earning young population  rapid urbanization and increased allocation for rural development schemes like NREGA and Bharat Nirman have also added to the positive momentum
CII Survey has also identified some major issues and constraints faced by the FMCG sectors  Fake or counterfeit products are a serious challenge before the industry  According to estimates they amount to a loss of around Rs 27 Billion to the exchequer  Rising input cost including high cost of raw materials  increase in packaging cost and higher logistics cost due to fuel price increase are all affecting the profit margins of FMCG companies  Lack of proper infrastructure and logistics  multiple taxes  absence of FDI into multi brand retail are the other issues constraining the full take off of the FMCG Sector 
The survey urges the need for pro active government action in the form of early implementation of GST  strict monitoring and controlling of prices  enforcement of copyrights and facilitating better infrastructure facilities  All these steps are vital to achieve lower cost  improved quality and better performance in the competitive environment