India's Companies Navigate Commodity Inflation Ahead of Festive Season

As India prepares for the upcoming festive season, companies are struggling to balance their margins and pricing amidst persistent commodity inflation. The war in West Asia has caused volatility in crude oil prices, which have risen to $100 per barrel, while copper prices have hit new all-time highs.

Brands such as Blue Star, Haldiram Marketing, LG India, Goldmedal Electricals, and Godrej Appliances are taking measures to mitigate the impact of rising costs. They are considering alternatives, removing non-essential product features, and localizing production to reduce input costs.

Umesh Kumar Agarwal, director at Haldiram Marketing, noted that prices are moving on sentiment as much as fundamentals, making it challenging for companies to predict and adjust their pricing strategies. Sanjay Chitkara, director and co-CSMO at LG India, stated that the company will focus on localisation, productivity, sourcing, and operational efficiencies before passing on cost increases to consumers.

Kishan Jain, director at Goldmedal Electricals, said that the company will absorb further increases in commodity costs rather than pass them on to consumers. Retailers Association of India (RAI) executive director & CEO Kumar Rajagopalan noted that input costs for retailers have risen by about 20% since the start of the war, with only half being passed on to consumers, hurting margins.

Godrej Appliances is banking on premiumisation and consumer desire for product upgrades to support festive demand, targeting over 40% growth for the season. Haresh Karamchandani, MD & group CEO at HyFun Foods, expressed concerns about market value-consciousness, particularly among entry-level consumers.