The ongoing Gulf conflict has dampened consumer spending in India, leading the global consumer research firm Worldpanel by Numerator to cut its growth forecast for the fast-moving consumer goods (FMCG) sector from 5% to 3% for the calendar year 2026. This adjustment comes after the sector reported a 5.4% rise in sales volumes during the March quarter, the strongest growth in two years. Rising crude oil prices are driving up costs for packaging, transportation, and fuel, prompting companies to increase prices on essential products like biscuits, soaps, and shampoos. If the conflict continues and monsoon rains are weak, the forecast could further deteriorate. Urban demand remains robust at 6.4%, while rural demand has improved to 4.4%, driven primarily by food and beverages. However, inflation remains a significant concern, particularly affecting rural consumers who may revert to cheaper options. Hindustan Unilever has already raised prices by 2-5% due to an 8-10% increase in material costs.