Auto industry likely to return to 7% growth with GST rate rationalisation: Maruti Suzuki India

Maruti Suzuki India on Thursday said the GST rationalisation would help the automotive industry to come back to about 7 per cent growth on a yearly basis.

In a statement, Maruti Suzuki India Chairman RC Bhargava said the automotive industry would be a direct beneficiary of faster economic development.

“The growth of the car industry in general will also benefit from the GST system. We expect the industry growth rate to come back to about 7 per cent a year. Manufacturing growth and employment will both benefit,” he added.

As per earlier estimates, the passenger vehicle segment was projected to witness a modest 1-2 per cent growth in FY26.

In particular, Maruti Suzuki is grateful for small cars being placed in the 18 per cent GST basket, Bhargava stated.

“The 10 per cent lower tax will stimulate a flagging market, and many more people will be able to buy safer and more comfortable means of mobility,” Bhargava said.

Terming the GST rate rejig as a major reform, he noted that it would give a boost to the entire economy and take the country closer to its goal of a Viksit Bharat.

“This reform is another step that would empower the people to shape their future themselves,” he added.

The last budget put a substantial amount of money into people’s pockets, besides, borrowing rates have come down due to inflation control and financial prudence, he noted.

“The new GST system will make many items of daily use more affordable. The people will have more purchasing power, and that would stimulate more demand and production. The speed of decision-making and implementation is also admirable,” Bhargava stated.

Audi India Head Balbir Singh Dhillon said the automaker views the GST simplification as a step in the right direction - one that supports industry growth and helps expand the market.

“The GST Council’s move to retain a low rate for EVs is a welcome step; this brings much-needed clarity and makes our portfolio more accessible to our discerning buyers,” he added.

Such reforms help stabilise the business environment and help devise strategies that benefit all stakeholders in the best possible manner, Dhillon said.

JK Tyre & Industries Chairman & Managing Director Raghupati Singhania said that the government has somewhere eased consumer burden while catalysing fresh demand across sectors.

“With regards to GST reduction on tyres from 28 per cent to 18 per cent, and on farm tyres to 5 per cent, is a landmark reform that will give a tremendous boost to the tyre industry and the mobility ecosystem,” he added.

Tyres are an essential part of everyday life, and this progressive step will benefit both consumers and manufacturers alike, he stated.