Indian FMCG companies on alert as Nepal political crisis escalates
NEW DELHI : Indian fast-moving consumer goods (FMCG) majors with significant operations in Nepal are monitoring the political crisis in the neighbouring country. Companies including Dabur, ITC, Britannia, Marico, Patanjali, and Reliance Consumer have advised employees to remain cautious amid ongoing unrest following the resignation of Nepal’s Prime Minister K P Sharma Oli.
Indian FMCG Presence in Nepal
Nepal is a key overseas market for several Indian consumer goods companies, with most operating through local distributors, manufacturing units, or joint ventures. Dabur and Britannia have established production facilities in the country, while ITC operates via Surya Nepal. Reliance Consumer has partnered with Nepal’s Chaudhary Group for both manufacturing and distribution.
The Chaudhary Group, Nepal’s largest conglomerate, has also recently signed a joint venture with Indian snack maker Bikaji Foods to expand its FMCG footprint. Such tie-ups highlight the importance of Nepal as a growth hub for Indian brands.
Political Unrest Raises Concerns
On Tuesday, Nepal witnessed violent protests that led to the resignation of Prime Minister K P Sharma Oli. Demonstrators stormed government offices, setting fire to Parliament, the Supreme Court, and homes of senior political leaders. At least 19 people were reported dead following police action during the unrest.
In response, Indian FMCG companies have heightened safety advisories to staff in the region. Industry executives say firms are maintaining close contact with their local partners while assessing the situation’s potential business impact.
Broader Industry
Varun Beverages, PepsiCo’s bottling partner, derives about 3% of its consolidated revenue from Nepal. Campa Cola has also recently entered the market. Roy noted, “Almost all major FMCG names like Dabur, ITC, Marico, HUL and others have a presence in Nepal via Indian listed entities.”
While Nepal remains a relatively small portion of revenue for most Indian players, its strategic importance in South Asia makes the situation significant for long-term planning.
Market analysts point out that while some companies such as Marico may not face long-term setbacks, others like Emami had experienced disruptions in similar circumstances in Bangladesh. For instance, Varun Beverages, PepsiCo’s bottling partner, generates around 3% of its consolidated revenue from Nepal. Recently, Campa has also entered the Nepalese market, adding to the competitive FMCG landscape.
According to Nuvama Institutional Equities’ executive director (research) Abneesh Roy, most Indian FMCG majors operate in Nepal through listed entities, which could face short-term pressure. “Almost all consumer staples players, including Dabur, ITC, Marico, and HUL, are active in Nepal, so there could be an overhang on performance until the political climate stabilises,” he noted.