When GST 2.0 first entered the conversation, the mood across the CPG industry was familiar, cautious, a little tense, and quietly bracing for the usual cycle of disruption. New tax structures rarely begin with celebration. They begin with confusion, re-stickering, distributor calls piling up, and the sinking feeling that the next few weeks will be spent firefighting rather than planning. Which is why what happened next felt unexpected. Instead of the slowdown everyone predicted, the market began showing signs of something we haven’t seen in a long time.

It started subtly. Category managers noticed shelves were moving faster, even without heavy promotions. Field teams reported that retailers were ordering slightly more than usual. Hiring inched up again, 10 to 20% in some organisations, a clear sign that brands were preparing for movement, not retreat. And consumers, without dramatically changing behaviour, began buying with a sense of ease. Not more, just more comfortably. Even before GST 2.0 fully kicked in, the shift in income-tax slabs had already freed up anywhere between ₹50,000 to ₹1.14 lakh a year for millions of middle-class households. Repo-rate cuts softened the urge to save and strengthened the comfort to spend. By the time the new GST rates finally arrived, consumers were primed not for indulgence, but for stability.

General trade felt this shift most clearly. Kiranas had already been growing steadily over the last few quarters, but GST 2.0 acted like an accelerant. With more disposable income in the hands of the middle class, everyday basket purchases grew smoother and more frequent. Retailers began reporting faster hand-to-mouth cycles, and their dependence on promotions decreased because natural pickup improved. Essentially, the kirana channel didn’t just sustain its dominance; it benefited first and fastest from the newfound affordability flowing into households.

Navaratri became the first major proof point. With 34% value growth and 43% YOY volume growth, it didn’t behave like a post-reform anomaly. It behaved like a market rediscovering its appetite. And just when the industry thought the festive surge had peaked, Diwali added the final push, not explosive, but steady, rising from 4.8% to 6.8%. Beneath the number sat familiar realities: retailers clearing old MRP stock, distributors stabilising input tax credit positions, and consumers advancing their spending thanks to renewed optimism. It wasn’t weak demand; it was demand reorganising itself.

Category movements added even more texture to the story.

• Dairy, often the closest indicator of household comfort, surged across milk, paneer, and cheese.
• Personal care, which had been shrinking for months, staged one of the sharpest turnarounds during Navaratri.
• Home care recovered into healthy double digits.
• Packaged foods saw an early uplift and then settled into consolidation.
• Chocolates and confectionery stayed soft, a clear sign that indulgence habits are becoming more considered.
• Beverages felt the immediate pressure of the 40% GST bracket, revealing how sharply consumers react to price sensitivity in high-frequency categories. 

These patterns rarely move in sync unless something deeper is shifting beneath the surface.