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New Delhi, Dec. 25

The fast moving consumer goods (FMCG) sector would witness over 40 per cent growth in the semi-urban and urban areas, according to an analysis carried out by the Associated Chambers of Commerce and Industry of India on `Future prospects of FMCG'.

The size of the sector would go up from the present Rs 38,500 crore to Rs 50,000 crore by 2010, says the analysis.

In urban India alone, the sector would witness over 100 per cent growth with its size increasing to Rs 35,000 crore by 2010 from the present Rs 16,500 crore, says the analysis adding that the overall size of the sector, which would include the rural and semi-urban market, would grow to Rs 85,000 crore.

In the year 2003-04, the size of the FMCG sector stood at Rs 47,500 crore, which increased to Rs 55,000 crore by December 15 of this year, registering an increase of 16 per cent.

Currently, the urban market for FMCG is growing at an annual growth rate of around 20 per cent while the growth for semi-urban and rural areas is less than 10 per cent, says the analysis.

Though the semi-urban and urban market for FMCG would grow larger, according to the analysis, it is bound to put a severe pressure on the margins of manufacturers of FMCG products due to intense competition.

(This article was published in the Business Line print edition dated December 26, 2005)
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