Mumbai, June 3 -- India's urban middleclass may be emerging as the weak link in the consumption story, with its income growth failing to keep pace with inflation and prompting consumers to defer discretionary spending, says Nestle India chairman and managing director Manish Tiwary. The warning comes as fast-moving consumer goods (FMCG) firms have started hiking prices to offset higher input costs, raising concern over the durability of the recent recovery in urban demand.

"The challenge (in India's growth story) is more in the urban areas. That's where some of the inflation factors we've been talking about. the growth in real earnings has not kept pace," Tiwary said at the Citi India Conference 2026 in Mumbai.

This lag could affect disc...