Crunch fails to halt Indian spend

By Sunil Raman
BBC News, Delhi

The Indian retail sector continues to thrive

Consumer spending in India continues to grow on the back of increasing demand for goods such as television sets and refrigerators, new figures show.

They show that demand for consumer goods remains strong despite the slowdown in sectors such as real estate and car manufacturing.

The figures are compiled by marketing information company AC Nielsen.

India has a huge population dependent on domestic goods and the rural sector is said to be a driving force.

The figures show that the global financial crisis has had little impact on consumer spending in India.

The available data shows that there has been a steady growth in spending on television sets, microwave ovens and other consumer goods over the past few months.

Rising wages

Three successive years of good farm growth have spurred rural demand, which has outstripped urban demand.

There has been rising demand for shampoos, hair oils, toothpastes and soaps in rural India, home to around 70% of Indians.

The agricultural sector is a lynchpin of the economy

A recent study by the Federation of Indian Chambers of Commerce and Industry showed that the number of rural households using branded products had grown significantly in recent years.

The festival season in October and the marriage season in winter - when millions of Indians spend huge sums of money to buy consumer goods - have also performed well.

This combined with the payment of increased wages to millions of government employees has seen rising sales.

India's biggest retail store chain, the Future Group, with a presence in 1,000 cities, recently reported year-on-year growth.

Representatives of consumer goods companies say they are upbeat about the future because of India's huge population.

But the picture is not all rosy: carmakers Nissan and Renault have scaled down plans for joint projects in India after a sharp fall in car sales in the region.

Demand for trucks in India has dropped by more than 60% over the past year because of the credit crunch and a sharp drop in construction activity.