According to a NielsenIQ report released on Tuesday, India's consumer goods market grew by 9% in the July-September quarter as spending power improved in the hinterlands. According to the market research agency, rural markets continued to rebound during the quarter, with sales volumes increasing 6.4% from 4% in the previous quarter.

Rural market volumes have declined by 2%-5% during the previous four quarters. Demand for consumer products has remained weak in rural India, with rising prices for common commodities like milk and wheat flour causing people to cut back on both essential and discretionary purchases.

Slower price hikes, a drop in unemployment, and the government's move to slash cooking gas costs, according to Satish Pillai, Managing Director of NIQ India, boosted consumers' desire to spend.

In July, retail inflation in India reached a 15-month high before falling in August and September. Unemployment declined to 7.1% in September, according to the Centre For Monitoring Indian Economy, before climbing to more than 10% in October. According to the poll, an increase in consumer expenditure on discretionary categories like personal care and home care products implies that rural consumers are beginning to spend on non-essential things.

"Impulse food categories continue to exhibit strong growth, and we see a recovery in habit-forming categories such as biscuits, tea, noodles, and coffee after five quarters," stated Roosevelt D'Souza, head, of customer success at NIQ India.

While rural markets showed signs of recovery, metropolitan areas maintained a consistent rate of consumer growth. According to the research, modern trade rose 19.5% during the quarter, while traditional trade had a 7.5% increase in consumption. Modern trade comprises enormous supermarket chains, whereas traditional trade includes mom-and-pop shops. "This renewed optimism across the country augurs well for the festive season," added D'Souza.