India's domestic passenger car industry will see a muted fiscal fiscal year from 2025-26 with low-range sales growth in the 1-4 percent range, according to a report released by the rating agency, ICRA on Monday, September 1.
The report says optical volumes decreased between April and July. Demand is expected to increase in the coming quarters due to steady new model releases by automotive companies and the potential reduction of the GST burden under the new GST reforms, the report said.
The government of India plans to introduce a new GST regime, reducing tariffs from 5 percent, 12 percent, 18 percent, and 28 percent to 5 percent and 18 percent. This optimized structure is expected to reduce costs for automakers, potentially supporting the long-term growth of the industry.
On the export front, passenger vehicle shipments in India increased by 9 percent year-on-year. This export momentum highlights the resilience of Indian automakers and positively contributes to the overall efficiency of the industry, despite fluctuations in the domestic market, the report said.
