MUMBAI: Consumer goods giant Unilever said it saw improvement in India with higher demand-led growth driven by price cuts due to the transition to a new tax regime. “While conditions in our developed markets remain challenging, we are starting to see signs of improvement in some of our biggest emerging markets including India and China,” said Unilever CEO Paul Polman in a statement after posting a 2.6% underlying sales growth during third quarter. India is the second largest market for Unilever after the United States of America, contributing nearly 9% to total sales.During the quarter ended June, its Indian unit, Hindustan Unilever , posted a 6% sales growth with flat volume growth due to trade destocking and reduced buying from one of its largest customer — canteen stores department. The maker of Lux soap and Dove shampoo said volume growth improved in India after the goods and services tax implementation. “As expected, price growth lowered as the benefits of the tax change were passed on to consumers,” added the statement released Thursday.The company maintained its forecast for full-year underlying sales growth of 3-5%. Last quarter , the company said tax benefits from the introduction of GST in India will be passed on to consumers with an impact at the global level of around 28 to 30 basis points on price in the second half.Last month, the company said it had been working in a planned way for long for a smooth transition in GST and has seen that translate into share increases amongst a big part of the business.According to agency reports, the company blamed poor weather in Europe, hurricanes in the United States and earthquakes in Mexico for disrupting its sales. But it also cited the growing threat from local competitors in markets such as US ice cream and Southeast Asian personal care.Unilever lifted its profitability target in July and there was some concern that lower spending on marketing was having a negative impact on sales.“Our competitiveness has dropped off a little,” chief financial officer Graeme Pitkethly said, according to Reuters. The company is only gaining market share in about half of its business, he said.Unilever had reduced its advertising and marketing spending by 130 basis points in the first half of the year, in an effort to cut costs in the wake of Kraft's bid, and one analyst said that may have hurt sales.