(Reuters) -India late on Wednesday announced tax cuts on hundreds of consumer items ranging from soaps to small cars to spur domestic demand, and simplified its complicated goods and services tax structure to two rate slabs from four, with some exceptions for luxury and “sin” goods.
The benchmark BSE Sensex and Nifty 50 rose as much 1.1% on Thursday. By 11:55 IST, they pared some gains and were up about 0.5% each.
Here is how the industry has reacted:
ANISH SHAH, GROUP CEO & MD, MAHINDRA GROUP
“The next-generation GST reforms… mark a defining moment in India’s journey towards building a simpler, fairer and more inclusive tax system.
“At Mahindra, we view these reforms as transformative. They simplify compliance, expand affordability, and energise consumption, while enabling industry to invest with greater confidence.”
SAURABH AGARWAL, PARTNER & AUTOMOTIVE TAX LEADER, EY INDIA
“The rationalization of GST rates on automotive vehicles and parts is a truly welcome and significant development. By making vehicles more affordable across all segments, this move will not only boost consumer spending but also simplify complex classification disputes that have long burdened the industry.”
SAMIR SHAH, EXECUTIVE DIRECTOR & CFO, HDFC ERGO GENERAL INSURANCE COMPANY
“The GST Council decision to exempt individual health insurance from GST is a welcome development. This move aligns perfectly with the broader ambition of the regulator of ‘Insurance for All by 2047,’ providing a tangible step forward in that direction.
NILESH SHAH, MANAGING DIRECTOR, KOTAK MAHINDRA ASSET MANAGEMENT CO
“The GST announcement lowers inflation, increases growth, boosts consumer sentiment, doesn’t disturb the path of fiscal consolidation, improves ease of doing business and partially offers adverse effects of tariffs.”
SHAILESH CHANDRA, PRESIDENT, SOCIETY OF INDIAN AUTOMOBILE MANUFACTURES
“This timely move is set to bring renewed cheer to consumers and inject fresh momentum into the Indian automotive sector… these announcements will significantly benefit first-time buyers and middle-income families, enabling broader access to personal mobility.”
C S VIGNESHWAR, PRESIDENT, FEDERATION OF AUTOMOBILE DEALERS ASSOCIATIONS
“This is a decisive step that will boost affordability, spur demand, and make India’s mobility ecosystem stronger and more inclusive.
“One area that may need earliest clarification is about levy and treatment of cess balances currently lying in dealers’ books, so that there is no ambiguity during transition.”
SANJEEV ASTHANA, CEO, PATANJALI FOODS LIMITED
“At Patanjali Foods, we are fully committed to passing on these benefits to our consumers. This initiative will not only enhance FMCG penetration across urban and rural India but also act as a catalyst for broader economic revival… categories such as ghee, soaps, biscuits, noodles, honey, and chyawanprash will benefit from this reduction.”
RADHIKA RAO, SENIOR ECONOMIST AT DBS BANK
“Lower GST rates will be positive for growth in the second half of the year and FY27, besides improving operational efficiency and expanding the size of the formal economy.”
SHRIPAL SHAH, MD & CEO, KOTAK SECURITIES
“The GST rate cuts … should directly boost demand, help traders and businesses see higher volumes, and may even favourably impact next quarter’s earnings… The key will be how quickly companies pass on the benefits to customers.”
DEVARSH VAKIL, HEAD OF PRIME RESEARCH, HDFC SECURITIES
“The GST reforms represent a paradigm shift toward economic rationality… Combined with RBI rate cuts, FY26 income tax rebates and moderating inflation, these reforms create multiple stimuli for consumption and economic growth.”
SUDARSHAN VENU, CHAIRMAN, TVS MOTOR COMPANY
“It’s a welcome move as it will help two wheelers become more accessible and also help those looking to upgrade.”
NEERAJ AKHOURY, PRESIDENT, CEMENT MANUFACTURERS’ ASSOCIATION AND MANAGING DIRECTOR, SHREE CEMENT
“Bringing GST down to 18% corrects a long-standing anomaly, aligns cement with other core building materials and enhances global competitiveness.”
NITIN RAO, CEO, INCRED WEALTH
” (I am ) positive this will play out, though a small concern remains where recent measures like the rate cuts and budgetary measures taken on reduced taxes have not created the necessary consumption boosters.”
RAHUL SINGH, CIO-EQUITIES, TATA ASSET MANAGEMENT
“The GST rate rationalisation, following the income tax cuts and lower interest rates, is a serious effort to boost consumption and hence the overall economic growth outlook.
“While the direct beneficiaries include consumer, autos, cement, healthcare and insurance sectors, the second order beneficiaries in terms of growth will be retail banks & NBFCs.”
RAJNEESH KUMAR, CHIEF CORPORATE AFFAIRS OFFICER, FLIPKART GROUP
“By lowering input costs for farmers, simplifying compliance for MSMEs and enabling small sellers, artisans/weavers and smallholder farmers to seamlessly join e-commerce across states, these reforms will further strengthen India’s growth engine.”
SHEETAL ARORA, CEO, MANKIND PHARMA
“By removing GST on lifesaving rare-disease and oncology therapies and reducing it on essential medicines and diagnostics, the government has signalled that affordability and innovation can go hand in hand.”
AMIT PAITHANKAR, CEO OF WAAREE ENERGIES
“The reduction will lower project costs and accelerate the capacity addition needed to meet India’s clean energy targets.”
ARNAB BANERJEE, MD & CEO, CEAT
“By addressing a long-standing demand of the industry, the Council has not only provided a boost to the automotive ecosystem but also created room for greater formalisation, compliance, and sustainable growth in the sector.”
SHENU AGARWAL, MD & CEO, ASHOK LEYLAND
“The specific relief for the commercial vehicle industry is especially welcome. On one hand, it will spur freight traffic, and on the other, it will bring down the cost of buses and trucks.”
AASIF MALBARI, CHIEF FINANCIAL OFFICER, GODREJ CONSUMER PRODUCTS LTD
“This is a positive trigger for demand and a strong driver of volume growth. This move will ultimately contribute to overall economic momentum. We are fully committed to ensuring that the GST rates reduction benefits are passed on to consumers.”
VENKATRAM MAMILLAPALLE, MANAGING DIRECTOR, RENAULT INDIA
“We believe the reform will accelerate rural and urban demand alike, boost manufacturing and contribute strongly to India’s economic momentum.”
UNSOO KIM, MANAGING DIRECTOR, HYUNDAI MOTOR INDIA
“The GST overhaul will directly benefit the automotive sector. The announced reforms align seamlessly with the government’s commitment to Viksit Bharat and the Make in India initiative, encouraging domestic manufacturing and boosting demand across both urban and rural markets.”
(Reporting by Chandini Monnappa, Bharath Rajeswaran, Manvi Pant, Kashish Tandon, Meenakshi Maidas, Nandan Mandayam, Yagnoseni Das, Vivek Kumar M and Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)
