The rising Indian middle-class, with increased disposable income and a huge rural market, has made the FMCG sector look more attractive than ever.

Fast Moving Consumer Goods (FMCGs) as such does not have any structured definition. However, one can attempt to formulate a definition looking at the following characteristics that epitomize a FMCG product. A FMCG product is consumed at least once a month, sold under national brands in consumer packages through a vast distribution network and is consumed directly by end user. In short we can say that a FMCG sector represents products that are used frequently. The main segments can be classified as personal care (oral care, cosmetics, hair care, soaps, and toiletries), household care (fabric wash and household cleaners), branded and packaged food and tobacco.

In view of the frequent consumption by a large number of people, the FMCG sector has been an extremely important component of the country's GDP. In fact it is the fourth largest sector in the economy with a total market size of US$13.1 bn. The sector is characterized by strong presence of huge multinationals or their subsidiaries. It is characterized by a well established distribution network, where strong competition exists between the organized and the unorganized sector with low operational costs. The Indian FMCG sector is all set to witness rampant activity with the market expected to triple from US$11.6 bn in 2003 to US$34 bn by 2015. The opportunity arises from the fact that the penetration level in most major product categories is still too low which indicates a potential for improvement. The burgeoning population coupled with an increasing disposable income and an aspiring middle class presents a mouth watering opportunity for the FMCG companies. Growth is likely to come from consumers' upgrading their lifestyles. An example of this can be of the food processing industry. With 200 million people expected to upgrade themselves to processed food by 2010, India needs an investment of US$28 bn.

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