GST 2.0 sparked India’s auto rush, and it’s not over
A year after India's GST 2.0 reform took effect, auto sales in the country have surged, according to industry leaders. Maruti Suzuki, the top carmaker, expects to boost its capital expenditure, driven by a 36% year-on-year increase in passenger vehicle sales from April to August 2026, and a staggering 96% surge in the entry segment.
The head of Mahindra & Mahindra, echoing similar trends, reported a 17% rise in SUV sales, alongside 20% growth in light commercial vehicles and tractors. The tax reform, which lowered GST rates for several mass-market vehicle categories, has brought affordability to a broader range of consumers, encouraging both new buyers and those who delayed purchases.
This demand surge extends beyond passenger vehicles, with Mahindra & Mahindra seeing strong growth across its SUV, light commercial vehicles, and tractor segments. As a result, the industry is investing more in electric vehicles, with plans to expand its capacity by 4,000 units by March 2027.
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