New Delhi, August 18, 2025 – India’s proposal to rationalize Goods and Services Tax (GST) is a “huge reform” that will strengthen competitiveness and benefit customers, said RC Bhargava, Chairman of Maruti Suzuki, the country’s largest carmaker.
In an interview with Reuters, Bhargava said the restructuring will enhance the competitiveness of Indian products, while the opening of trade borders will bring in much-needed competition, helping expand the market and benefiting consumers.
Government’s GST Proposal
According to government sources cited by Reuters, India’s federal government has proposed lowering the GST rate on small cars to 18% from 28%, as part of its broader consumption tax reforms.
The move, if implemented, is expected to:
- Boost affordability of small cars.
- Expand the domestic automobile market.
- Encourage manufacturing competitiveness in India.
- Provide relief to middle-class buyers who form the core of small car demand.
Industry Impact
The Indian auto industry has long advocated for lower taxation on small vehicles to stimulate demand and reduce ownership costs. Bhargava emphasized that reforms like these could help align India’s auto sector with global cost structures, making it more competitive internationally.