From Detergents to Noodles: Why Your Grocery Bill May Go Up Despite GST Cuts

After several months of holding back price hikes following the new GST rate rationalisation, fast-moving consumer goods (FMCG) companies are now increasing prices of everyday products. Goods like detergents, hair oils, noodles, cereals and other household staples are set to become costlier by at least 5% in many cases.

The earlier phase of GST cuts had prompted companies to quickly pass on tax benefits to consumers to comply with anti-profiteering regulations. That provided temporary relief on retail prices. However, companies are now facing renewed cost pressures, which has prompted them to revise prices upward.

According to distributors cited by Economic Times, select higher-priced packs have already begun reaching store shelves in the current quarter of FY26.

Companies Confirm Price Hike

Hindustan Unilever Limited (HUL) has confirmed that price hikes in its home care segment are underway. CFO Niranjan Gupta during the investiors call said that some products with revised pricing are already in the market, while others will follow soon. HUL's home care portfolio includes well-known brands such as Surf Excel, Rin, Vim and Domex.

Tata Consumer Products also indicated some pricing adjustments in tea. Managing Director Sunil D'Souza said tea prices saw a small uptick toward the end of the December quarter and that future pricing decisions will depend on commodity trends in the coming months.

Similarly, Dabur India has raised prices by around 2% in the ongoing quarter. CEO Mohit Malhotra told ET that the company had earlier postponed price hikes due to anti-profiteering scrutiny after GST cuts. The higher prices will likely continue into the next financial year.

What Is Pushing Grocery Price?

The renewed round of price hikes is largely being driven by rising input costs and currency weakness.

Coconut oil prices have doubled over the past year, directly affecting hair oil manufacturers. Crude oil prices have firmed up in recent weeks, pushing up the cost of petroleum-linked inputs like sulphur and n-paraffins used in home and personal care products. Milk prices remain a key cost variable for dairy-linked categories, according to a report by Systematix Group.

Although some agricultural commodities like palm oil, wheat, sugar and cocoa have stabilised in recent quarters, companies say overall cost pressures remain elevated.

The weakening rupee has also added another layer of strain. The Indian currency touched an all-time intraday low of ₹92.02 against the US dollar in January, making imported ingredients more expensive. Breakfast staples like oats and almonds rely heavily on imports.

Aditya Bagri, Group director at Bagrry's, told ET that the company is considering marginal price increases on select packs because depreciation has significantly increased import costs.

Growth Remains Uneven

Despite pricing pressures, the sector has shown reasonable growth. According to the Systematix report, consumer staples companies posted 9% year-on-year (YoY) revenue growth in Q3 FY26, while sales volumes rose 6%.

However, some of that improvement may not reflect a real jump in consumer demand. The report noted that part of the increase came after GST cuts, when companies adjusted prices and retailers restocked shelves following earlier supply disruptions. Because of this, it is still too early to say whether consumer demand has truly strengthened or if the growth was partly due to temporary factors.

Among companies, Marico, Nestle India and Tata Consumer Products reported stronger revenue growth, while Colgate, HUL and Dabur posted more modest gains.

Margins have improved slightly on a sequential basis as some commodity inflation eased, but companies continue to spend heavily on advertising, promotions and distribution expansion to stay competitive.

What Lies Ahead?

The GST-related revenue benefits are expected to continue for a few more quarters before normalising. For FY27, growth is likely to be more volume-driven if inflation remains contained and rural demand improves, the report added.

According to a guidance report by Motilal Oswal, Godrej Consumer Products expects steady volume growth in India over the next 18–24 months, while Britannia Industries is focusing on expanding e-commerce and functional food offerings. Emami plans to push smaller packs in rural markets to sustain demand.

For consumers, the immediate takeaway is simple, the brief phase of GST-led price relief is fading. While inflation in some raw materials has eased, currency pressure and rising input costs are prompting FMCG companies to cautiously rebuild pricing power, meaning household essentials are likely to become slightly more expensive in the months ahead.