India FMCG sales growth to accelerate in FY09 - survey

NEW DELHI (Reuters) - Sales at Indian fast-moving consumer goods companies will grow faster in 2008/09 than the previous year as rising income and increasing aspirations fuel demand, an industry body said on Tuesday.

Rising rural and middle-class income and the expansion of the

retail industry have boosted demand for consumer goods, such as soaps and cosmetics in Asia's third-largest economy.

Sales in the sector will grow by 16 percent to 9.52 trillion in the year to March 2009, compared with an estimated 14.5 percent growth a year ago, the Federation of Indian Chambers of Commerce & Industry (FICCI) said, citing a survey it conducted.

"(The) survey projects higher growth across sectors in the FMCG segment in view of the growing economic fundamentals, increased literacy, rapid urbanisation, rising aspiration levels, growing consumer demand," FICCI said in the study.

A proposed pay hike to government employees and rising salaries for private sector workers would help too, FICCI said.

In the first quarter to June, the sector would have grown 15.5 percent, FICCI said, based on figures from market leader Hindustan Unilever Ltd whose sales in the January-March period grew 19 percent to 37.94 billion rupees.