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GST reforms to increase demand for automobiles

by Blitz India Media
September 12, 2025
in News
GST reforms to increase demand for automobiles
Blitz Bureau

NEW DELHI: GST reforms in the automobile sector will increase demand, benefiting automobile manufacturers and ancillary industries such as tyres, batteries, glass, steel, plastics, and electronics, according to the Government. Rising vehicle sales will create a multiplier effect, boosting MSMEs across the supply chain. The rate cuts cover bikes (up to 350cc), buses, small to luxury cars, tractors (less than 1800cc), and auto parts.

The auto industry supports over 3.5 crore direct and indirect jobs in manufacturing, sales, financing, and maintenance. Increased demand will lead to new hiring in dealerships, transport services, logistics, and component MSMEs. Informal sector jobs like drivers, mechanics, and small service garages will also benefit from the GST reductions, the Government noted.

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Credit-driven vehicle purchases will support retail loan growth, improve asset quality, and promote financial inclusion in semi-urban India. Rationalised GST rates provide policy certainty, encouraging fresh investments and supporting Make in India initiatives. GST cuts will incentivise replacing old vehicles with new, fuel-efficient models, promoting cleaner mobility,” it added.

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