Auto Industry on One Year of GST 2.0

As India marks one year since the rollout of GST 2.0, the automotive industry takes stock of how structural rationalisation across indirect tax brackets has impacted demand, production planning, and overall vehicle affordability. Over the past 12 months, the revision in rates has reshaped pricing across the vehicle market, influencing retail momentum from entry-level to premium segments.

Sai Giridhar, President, FADA

"One year ago, a single, decisive reform rewrote the arithmetic of aspiration for millions of Indian families. On its first anniversary, the verdict sits in the numbers: in the eleven months since GST 2.0 took effect — October 2025 to August 2026 — Indian auto retail has registered over 3 crore vehicles, growing nearly 20% year-on-year, against under 5% in the comparable year before the reform. In a single stroke, GST 2.0 quadrupled the industry's pace of growth.

The engine of this momentum has been one word — affordability. By permanently lowering the on-road cost of the vehicles that Bharat actually buys, the reform did not merely pull demand forward; it widened the market itself. The flying start of last festive season has not faded; a year on, it has become the new normal.

Two-wheelers — the truest barometer of mass India — have reclaimed a peak last seen in 2018; alternative fuels have, for the first time in history, overtaken petrol in passenger vehicles; and rural Bharat has begun to outpace urban India across the board. This is what a well-designed reform looks like when it reaches the last mile."

Anish Shah, Group CEO & MD, Mahindra Group

"GST 2.0 was an important milestone in India’s journey towards a simpler, more efficient and growth-oriented tax regime.

This momentum reflects the role that tax rationalisation can play in improving affordability and supporting demand across both urban and rural India.

GST 2.0 demonstrates how structural reforms, when combined with strong consumer demand and business investment, can create a virtuous cycle of affordability, consumption, investment and growth.”

Tarun Garg, MD & CEO, Hyundai Motor India

"The GST 2.0 reforms have been a significant catalyst for the Indian automotive industry, driving enhanced market accessibility and stronger consumer confidence.

Since their implementation a year ago, the 4 lakh-unit monthly wholesale mark is the new normal, reflecting the sector's robust growth trajectory. The passenger vehicle industry has recorded a YOY growth of 15 percent plus during September 2025-March 2026 and 29 percent plus during April-August FY2026-27 clearly demonstrating the strong impact of these reforms."