Guwahati: Fast-moving consumer goods (FMCG) companies have informed the central government that they will not be reducing prices of small-ticket consumer products like ₹5 biscuit packs, ₹10 soaps, and ₹20 toothpaste tubes, despite a recent Goods and Services Tax (GST) rate cut.
According to industry sources, companies argue that Indian consumers are extremely sensitive to standard price points. Any deviation such as reducing a ₹10 item to ₹9 could lead to consumer confusion, retail disruption, and supply chain issues.
“In India, ₹5, ₹10, and ₹20 are sacrosanct pricing slabs. If we reduce prices to odd figures, retailers face change issues and consumers hesitate to buy unfamiliar price packs,” said a senior executive at a leading FMCG firm.
Instead, brands plan to retain the current price points and pass on the GST benefit by increasing pack sizes. For instance, a ₹10 biscuit pack may now offer a few extra grams, or a ₹20 toothpaste may come with 10% more quantity effectively delivering better value to the consumer without changing the maximum retail price (MRP).
The GST Council recently slashed tax rates on several essential daily-use goods from 18% to 5%, expecting the benefits to trickle down to end users. However, FMCG companies maintain that their “extra quantity for the same price” approach complies with both market expectations and anti-profiteering norms.
Government officials are reviewing the industry’s response and may monitor how the benefit is being passed on in practice, but no directive has been issued so far.
Industry analysts say this method allows companies to maintain brand trust and pricing stability, while still delivering consumer value in a highly competitive market.
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