Indian companies are taking a range of measures to shore up profitability as a jump in global input costs hits margins and household budgets. Higher oil, freight and insurance expenses - which sources in the market attribute to disruption from the U.S.-Israeli war on Iran - have pushed firms to alter pricing strategies, shrink product packs and reshuffle supply chains.
Import-reliant economies such as India are feeling these pressures acutely, with the additional burden of a softer rupee exacerbating inflation and complicating decisions about how much of higher costs to pass on to consumers while demand remains uneven.
Economist Jayati Ghosh warned that India is particularly exposed to these developments, citing four key channels of risk: higher oil and fertiliser costs, weaker demand from the Gulf, softer remittances and the threat of capital outflows that could stoke inflation and slow growth.
On the retail front, several major consumer goods companies have opted for measured price increases. Hindustan Unilever, Godrej Consumer Products and Dabur India have implemented low- to mid-single-digit rises across product categories, and Britannia has signalled similar moves. In lower-priced mass segments, where consumer resistance to higher tags is strongest, firms are protecting price points by reducing package sizes rather than pushing up sticker prices.
"We are reducing grammage because we can’t breach those price points," said Mohit Malhotra, global CEO at Dabur, explaining the trade-off companies are making to preserve affordability at fixed price thresholds.
Automakers have followed a similar path. Maruti Suzuki, Mahindra & Mahindra, Tata Motors Passenger Vehicles and Hyundai Motor India have raised prices. Partho Banerjee, Maruti’s senior executive officer for marketing and sales, said the company felt compelled to increase prices but acknowledged the move is unwelcome for customers, especially first-time buyers: "We were left with no choice."
Airlines are also adjusting capacity and fares. IndiGo and Air India have trimmed flights, concentrating cuts on fuel-intensive international routes, and have raised fares to offset climbing aviation fuel costs.
Consumers are already moderating spending in response. "I have no family to feed, no school fees, and no monthly payments on a car. I’m still watching my spending as prices are up for almost everything, from travel to packaged food," said Aditi Anjana, a Mumbai-based communications professional in her 30s.
Cost control and margin defence
With limited scope to pass on the full extent of higher input costs, many companies are focusing on internal savings to defend margins. Hindustan Unilever has cut advertising outlays, and other firms are scaling back non-essential travel and marketing spend. Analysts say this belt-tightening can only go so far.
"The scope for further cost-cutting is gradually narrowing," said Uttam Kumar Srimal, an analyst at Axis Direct, adding that if commodity and fuel inflation prove persistent, companies could be forced into sharper price increases or absorb margin hits.
Shweta Rajani, associate director at Anand Rathi Wealth, highlighted sectors with significant global exposure - aviation, oil and gas, chemicals, logistics and capital goods - as likely to remain under pressure on margins if elevated input costs continue.
Supply chain and working capital adjustments
Beyond pricing and expense management, firms are actively reshaping supply chains and inventory policies to navigate trade route disruption and cost volatility. Dabur is rerouting shipments through alternative corridors such as Egypt and Turkey. Britannia is repatriating some manufacturing, bringing production back home to reduce exposure to external logistics shocks.
Several companies are front-loading purchases to lock in costs and are tracking demand more closely to avoid overstocking, reflecting tighter working-capital discipline. Arvind Fashions, for example, has accelerated inventory buys and increased reliance on local suppliers. Tata Group retailer Trent is adjusting raw material choices, packaging and product development to manage costs while preserving consumer price points.
"My priority is not to take prices up," said Umashan Naidoo, head of customer and beauty at Trent, which operates the Gen-Z focused affordable trendwear brand Zudio, indicating a preference for operational levers over direct price increases.
For market reference, the report notes the exchange rate used in coverage: ($1 = 94.9450 Indian rupees).
Companies and analysts quoted in this coverage portray an environment where incremental price rises, pack-size reductions and internal efficiency measures are being deployed simultaneously to preserve margins. How long these tactics can offset sustained global cost inflation remains an open question among market participants.