ITC bets big on FMCG, agriculture sectors with GST reforms seen boosting consumption

Consumer goods giant ITC Limited is stepping up investments in its fast-moving consumer goods (FMCG) and agriculture businesses, said Chairman & Managing Director Sanjiv Puri, adding that the government’s push to simplify the goods and services tax (GST) regime could act as a powerful consumption trigger.

In an exclusive interaction with CNBC-TV18’s Managing Editor Shereen Bhan, the ITC Chairman shared that the diversified conglomerate has committed ₹20,000 crore in fresh capital expenditure, with a sharp focus on expanding its FMCG portfolio, strengthening agriculture linkages, and scaling its paperboard operations.

“We are very optimistic about the Indian market. Despite global challenges, the economy is performing well, and the headroom to grow is immense,” Puri said at CNBC-TV18’s Leadership Collective forum.

The investment push comes at a time when the GST Council is considering a major overhaul — moving from four tax slabs to a simplified two-rate structure of 5% and 18%. According to Puri, this reform would not only reduce costs for consumers but also ease compliance for businesses and MSMEs. “With taxes going down, prices will also go down, and this will significantly boost consumption,” he noted.

Also read: GST rate cuts could trim evasion, widen tax base: EY’s Saurabh Agarwal

For ITC, stronger household demand could accelerate volume growth. “In a country like India, where per capita consumption is still low, elevated costs have kept demand under stress. But now, with easing inflation, softer interest rates, and improving farm incomes, conditions are aligning for a significant uplift,” Puri said.

The company is also betting on agriculture as a long-term growth engine. ITC has been investing in resilient supply chains, digital agri-platforms, and value-added products to capture rising demand while supporting rural livelihoods. With food inflation moderating and GST rationalisation expected to make essentials more affordable, ITC sees a strong runway for growth in this segment.

While the GST overhaul may be revenue-neutral overall, Puri cautioned against higher levies on cigarettes, a major revenue drive for ITC, arguing that past hikes have only fuelled illicit trade without boosting government coffers.

Still, with demand tailwinds building in FMCG and agriculture, ITC is positioning itself for sustained expansion. “This is a very significant intervention to grow volumes,” Puri said of the GST reform, adding that it would give both consumers and corporates “good momentum” over the coming quarters.

ITC shares closed 1.19% higher at ₹411.50 on the BSE today (September 3).

Also read: ITC completes acquisition of 100% stake of Sresta Natural Bioproducts for ₹400 crore