New Delhi, April 7 (NationPress) According to a recent report, FMCG companies are encouraged to implement contingency-based supply chain strategies, streamline their portfolios, and manage revenue growth effectively to mitigate risks posed to India’s consumer goods and retail sectors due to the ongoing US–Iran conflict. The findings from EY India highlighted the necessity for more focused resource distribution, local sourcing, and backward integration in the value chain.

Industries most vulnerable to fluctuations in oil prices, petrochemicals, and global shipping—including edible oils, textiles, paints, packaged foods, and personal care products—are currently grappling with increased costs and pricing challenges.

As crude oil and derivative prices rise alongside ongoing supply chain disruptions, the impact is expected to reverberate across various sectors, potentially undermining the robust profitability trajectory of the industry.

Rising expenses related to packaging and transportation have escalated, and a declining currency is compounding the issue by raising import costs. Concurrently, supply chain obstacles are leading to heightened commodity prices, transportation fees, and market volatility.

Inflation in edible oils remains a significant concern, given that India imports approximately 57% of its edible oil requirements, with retail prices exceeding 7% in early 2026, according to the report.

FMCG firms utilizing palm oil, particularly in snacks, bakery items, and packaged foods, continue to experience pressure on profit margins.

These challenges are anticipated to result in increased retail prices or reductions in product quantity, leading to smaller packaging sizes.

Manufacturers of personal care products are facing shortages and price surges in critical inputs, particularly those derived from petrochemicals.

Scarcity and significant price hikes in materials such as silicone oil and ammonia have already affected specialized segments, including condoms and medical personal care items, where quality standards and alternatives are restricted.

The report anticipates that brands will likely postpone new product introductions and concentrate on core stock-keeping units (SKUs), aiming for stability in volume and margin preservation instead of expanding their portfolios.

Paint manufacturers are considering price increases of 2% to 5% if crude prices remain high leading into FY27, although competitive pressures within the sector may hinder substantial price adjustments being passed onto consumers.

aar/na