India’s month-long festive season brought a wave of consumer spending, with carmakers and retailers witnessing a sharp rise in sales following the government’s decision to reduce the Goods and Services
Tax (GST) on nearly 400 products. The tax cut, which began on September 22, encouraged shoppers to spend freely on everything from vehicles to home goods, marking a strong rebound for the economy that had been hit by the recent 50% import duty imposed by the United States.
According to data from retail intelligence platform Bizom shared with Bloomberg News, overall spending between September 22 and October 21, covering the period between Navratri and Diwali, rose 8.5% compared to last year. Total sales across India were estimated to have crossed 6 trillion rupees (around $67.6 billion). Items such as jewellery, electronics, clothing, and home furnishings saw high demand, while car dealerships across the country reported record traffic.
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B. C. Bhartia, president of the Confederation of All India Traders (CAIT), said in a statement that the festival season brought back strong buying momentum across several sectors, thanks to the tax relief.
Among the biggest winners were automakers. Maruti Suzuki India Ltd., Tata Motors Passenger Vehicles Ltd., and Mahindra & Mahindra Ltd. recorded some of their best monthly sales in recent times as the lower GST made cars more affordable. The tax reduction was the first major one in nearly a decade, giving a much-needed boost to consumer sentiment.
Hyundai Motor India Ltd. reported a 20% rise in sales on Dhanteras, compared to last year. Tata Motors, on the other hand, sold over 100,000 vehicles between Navratri and Dhanteras, according to Bloomberg’s report. Mahindra also enjoyed a 27% increase in tractor sales, helped by better rural incomes following a strong monsoon season.
The surge in demand has led some manufacturers to ramp up production. Maruti’s marketing and sales head, Partho Banerjee, revealed during a post-earnings call that teams have been working Sundays to manage the overwhelming number of bookings. Entry-level models like the Alto, S-Presso, WagonR, and Celerio are seeing particularly high demand.
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However, nalysts have advised caution in interpreting the sharp rise in sales. Nomura noted that part of the jump could be due to pent-up demand and suggested that trends from December to January will provide a clearer picture of sustained recovery.
Despite these concerns, companies remain upbeat. Kaleeswaran, a senior executive at Crompton, told Bloomberg that the positive sales trend could continue into early 2026, supported by rising activity in real estate and electrical segments. “Some of these green shoots are giving us the confidence that consumption is moving in the right direction,” he said.
Source: Bloomberg News
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