Mumbai, May 26 -- India's fast-moving consumer goods (FMCG) sector is expected to post slower volume growth in FY27 as war-induced inflation spike pushes up crude oil-linked input costs and weighs on consumer demand. This is likely to force companies to give up on their volume-led growth strategy for this year and focus instead on protecting margins through calibrated price hikes and shrinkflation. Analysts at credit rating agency Crisil said in a report last week that the 74 FMCG players they track, representing about one-third of the industry, are expected to post 2-3% volume growth in FY27, down from 5-6% in FY26. Their revenue is, however, seen up 8-10% this fiscal year, mostly because companies are likely to raise prices 6-7% as they partially pass on the increase in input prices to customers. Crude oil and linked inputs, such as plastic packaging, are getting costlier due to the disruptions out of the ongoing West Asia war. Large listed FMCG firms such as Hindustan Unilever Ltd, Britannia Industries and Dabur India, have started hiking prices of select products across portfolios. The situation has turned FMCG companies' FY27 business plan on its head. Earlier this year, the firms said volume-led growth, one that shows rising consumption, will be priority as the industry was seeing demand grow following the goods and services tax (GST) rate cuts on packaged food and other items in September 2025. Moreover, inflation was low, with the retail print at 0.25% in October 2025 and food inflation down to -5.02% on favourable weather conditions, robust crop supply, and the impact of GST rationalization. During October-December, segments tracked by consumer intelligence company NIQ, including food, home care, personal care and wellness, had seen volumes grow 1.9-3.2% year-on-year as companies implemented price cuts after GST rationalization. This development made companies aspire for volume-led growth. "We crafted sharper priorities with a clear focus on volume-led growth," said Priya Nair, chief executive, Hindustan Unilever Ltd (HUL) in April, at its quarterly analyst call. HUL reported underlying volume growth of 6% in Q4 FY26, marking its highest volume expansion in 15 quarters. Dabur India Ltd's FMCG business reported an underlying volume growth of 6%, its highest in over 18 quarters. Marico Ltd's India business reported an 8% volume growth, marking a 7-year high in Q4 FY26. In the same period, Nestle India posted its strongest quarterly growth in nearly a decade. But then, war-led inflation started to bite. "With inflation picking up in India business, we expect a part value growth through price increases to come in along with the volume growth that we have pencilled [in]," said Mohit Malhotra, global chief executive officer of Dabur India, in the May investor call. Marico too voiced concern over inflationary pressures. "We have thoughtfully built in higher crude assumptions for the rest of the year," Saugata Gupta, managing director and chief executive officer of Marico, told Mint in an interview earlier this month. "While it will soften if there is a resolution to the West Asia conflict, it will not be at the same level as last year." The sector's priority now will be to protect its margins as inflation rises and demand suffers....