Inflation could singe Indian consumers as manufacturers hike prices

Indian manufacturers are raising prices to pass on to consumers some of the burden of costlier energy and raw materials, which threatens to dent demand as well as a recovery from the COVID-19 pandemic, business leaders and economists say.

Prices of items from tea, coffee and biscuits to toothpaste and electric components have risen 4% to 10% in the last quarter, while construction supplies, such as cement and sanitary ware, have added as much as a fifth, they said.

Big companies such as Hindustan Unilever , Nestle, Procter & Gamble , Ambuja Cement  and Kajaria Ceramics , have blamed the increases on higher costs of oil and other raw materials.

As the economy swings into gear after pandemic curbs curtailed many activities over the last year, supply chain disruptions are also helping to drive up prices.

"This is a challenge, as India's economic recovery is still not broad-based and the rising prices will hurt consumer sentiment," said Kapil Gupta, chief economist at Mumbai brokerage Edelweiss Securities.