Sanjay Akhauri, president of JCPDA, noted that this decision is likely to reduce borrowing costs and stimulate demand in both urban and rural markets. He stated, “In times of high inflation, the RBI’s move will help decrease consumer goods prices, thereby enhancing purchasing power and improving consumption patterns across various regions.”

Akhauri mentioned that the 50-basis-point cut surpassed market predictions and is expected to boost liquidity in the economy, providing a crucial impetus to overall growth. While sectors like housing and automobiles usually benefit first from lower interest rates, he highlighted that the FMCG sector would also gain from increased consumer spending and boosted business confidence.
Despite the optimistic outlook, the Association raised concerns about banks not adequately adjusting their lending rates in line with repo rate changes. Akhauri pointed out that the effectiveness of the RBI’s initiative hinges on how quickly banks lower their interest rates.
“Banks often cite procedural delays or internal limitations as excuses not to pass on the benefits of monetary easing. The RBI or the government should issue clear directives to ensure compliance,” he noted.
In conjunction with this monetary policy shift, the JCPDA also highlighted the government’s recent decrease in import duties on essential raw materials, such as crude oil and palm oil, from 20% to 10%.
They argue that this could lower production costs for FMCG companies. Akhauri urged manufacturers to reevaluate their pricing strategies to ensure that consumers directly benefit from these changes. “The government should guarantee that this reduction is reflected in retail prices and doesn’t just protect company margins,” he added.
Akhauri expressed optimism that the combination of lower interest rates and reduced import duties would spark renewed investment in the sector, potentially leading to a robust cycle of consumption. He believes that if these monetary and trade policy adjustments are effectively implemented, they could pave the way for stronger growth across various domestic sectors.
As trade sentiment in the state shifts towards cautious optimism, the JCPDA has called on financial institutions and FMCG companies to work together in line with broader policy intentions. They believe that the success of these economic measures will ultimately rely on prompt action, transparency in pricing, and a strong commitment to passing benefits on to consumers.