Consumers have clearly benefited from the recent Goods and Services Tax (GST) reform, as the cost of several necessities and electronics has significantly decreased. The decision has reduced the cost of products for the middle class and is fueling a nationwide spike in holiday shopping.
Thanks to the GST cut, people now have more money, and as purchasing power increases, inflation naturally decreases.
Prior to last week, the Federation of Automobile Dealers Associations (FADA), which represents the Indian auto sector, saw a 34% year-over-year rise in sales over the Navratri holiday, which took place from September 22 to 30.
Sales of passenger cars increased by 34.8% during that time, while sales of two-wheelers increased by 36%. In September, total sales increased 5.22 percent to 1,827,337 units, up from 1,736,760 units in the same month last year.
Inquiries and reservations have grown dramatically in the two-wheeler, passenger, and commercial vehicle segments, according to FADA. Because supply chains are in a good position to satisfy rising consumer demand, industry analysts predict that this could be India’s best-ever festive retail season thanks to improved logistics and transportation.
On September 22, 2025, the major modifications to India’s Goods and Services Tax (GST) system, referred to as GST 2.0, come into force. The “next-generation GST reforms,” which Prime Minister Narendra Modi formally introduced, aim to streamline the tax law, facilitate compliance, and reduce the tax burden on needs.
Chairman of the BRICS Chamber of Commerce and Industry, Harvansh Chawla said, “The lower and middle classes have been most affected by the decrease in retail prices. People who could previously purchase a single item, say, for Rs 100, can now purchase several goods“.
“Traders will greatly benefit from the unprecedented sales that will occur this Diwali,” he continued.
Economist Dr. Manoranjan Sharma claims that while food and gasoline costs decreased during the month, India’s Consumer Price Index (CPI)-based inflation rate fell to a record low of 1.54 percent in September of this year, down more than eight years from the same month the year before.
In addition, India’s Wholesale Price Index (WPI)-based annual inflation rate decreased from 0.52% in August to 0.13% in September. Due to recent rate reduction, September GST collections also reached Rs 1.89 lakh crore, indicating a 9.1% YoY gain.
“Millions of people have benefited from the increased disposable income that the average person has today,” Dr. Sharma said.
In the end, GST reforms have decreased costs for both producers and consumers by lowering prices, improving credit flow, resolving tax inversion difficulties, and reducing conflicts.
Traders are hopeful that this season will be one of the best sales times in recent memory due to the rise in consumer confidence.