India’s consumer goods and auto majors are stepping up fresh investments in manufacturing over the next two years, betting on sustained demand growth as the impact of the goods and services tax (GST) reforms begins to show and commodity prices remain under control.
FMCG firms such as Nestle, Godrej Consumer Products, Reliance Consumer Products, JHS Svendgaard, DFM Foods and Haldiram’s are set to invest at least ₹5,000 crore in new manufacturing capacity, betting on a robust demand pick-up next year, industry insiders said.
Automakers Maruti Suzuki, Hyundai Motor, Tata Motors and Mahindra & Mahindra have also lined up combined capital expenditure of ₹1.77 lakh crore through 2029–30, with most of them announcing the investments before the GST revision.
Demand pick-up
“Nestle India sees 2026 as ‘a year of volume growth, with higher capacity expansion and a new greenfield plant, GST benefits and commodities stabilising,’” its chairman and managing director Manish Tiwary said.
The India unit of the Swiss packaged foods maker is in the process of setting up its tenth factory in Odisha for ₹900 crore, and is looking to accelerate investments in both greenfield and brownfield plants.
India is now Nestle’s largest market globally for Maggi instant noodles and second-largest for KitKat chocolates.
New Delhi had announced slashing of GST rates across daily-use goods and discretionary products such as cars, televisions and air conditioners, effective September 22, to spur consumption. While GST on butter, cheese, confectionery and salty snacks has been cut to 5 per cent from 12 per cent, that on chocolates, biscuits, corn flakes, coffee, ice cream, bottled water, hair oil, shampoo, soaps, shaving cream and toothpaste has been slashed to 5 per cent from 18 per cent.
Listed oral care maker JHS Svendgaard, which manufactures for HUL and Walmart as well as its own oral care brands Aquawhite and Dr. Gold, is investing ₹25 crore on a new plant in Kala Amb, Himachal Pradesh.
“This is a demand-driven and customer-focused investment; we are aligning our capabilities with global demand,” Nikhil Nanda, founder and managing director of JHS Svendgaard, said.
The plant, expected to be fully operational by 2027, will create 600 new jobs, he said.
Executives expressed optimism for demand pick-up across categories, and the investment push in manufacturing signals India Inc is betting on sustained consumption growth rather than short-term spikes.
Private equity firm Advent International-backed DFM Foods, which makes Crax packaged snacks and competes directly with PepsiCo and ITC, has lined up an investment of over ₹100 crore over the next 12 months.
“We are investing significantly in expanding our manufacturing footprint and adding capacity, on the back of continued demand increase and expected buoyancy over the next couple of years, with GST benefits,” said Vipul Prakash, chief executive officer of DFM Foods.
He said capacity is expected to go up by about 60 per cent within the next 12 months and will lead to a footprint of 13 self-owned and co-packing plants, up from eight currently.
Car launches, eye on export
The carmakers cited above will deploy capex in launching petrol, diesel, CNG, hybrid and EV models, ramping up capacities for domestic and export markets, and in undertaking research and development projects, company executives said. They did not give a break-up of the capex lined up for each year.
Except Korean firm Hyundai, all the other automakers had announced their capex before the GST rate revision. Eight out of every ten cars sold in India belong to these manufacturers.
Starting mid-2024, consumer demand in cities slowed down as surging costs of food and fuel impacted offtake and competition from regional and digital-first brands intensified.
