Maruti Chairman Urges GST Cut and United Stand on US Tariffs!
Maruti chief hits back at US tariffs, pushes GST cut for small cars.
In a powerful address at Maruti Suzuki India’s 44th Annual General Meeting in New Delhi today, Chairman R.C. Bhargava called for national unity in response to the 50% punitive tariffs imposed by the United States on Indian exports, effective August 27. Describing the tariffs as a form of economic “bullying,” Bhargava emphasized the need to uphold India’s dignity and support the government in navigating global trade challenges.
The tariffs, impacting labor-intensive sectors like shrimp, apparel, diamonds, leather, footwear, and gems and jewelry, have sparked widespread market uncertainty, with Bhargava noting that “President Trump has forced nations to rethink conventional policies and relationships” through the unprecedented use of tariffs in diplomacy.
Bhargava also hailed the Indian government’s proposed Goods and Services Tax (GST) restructuring as a transformative reform to bolster economic growth and employment. The Centre’s plan to simplify the GST into a two-tier structure of 5% and 18%, with a 40% rate for select luxury items, is expected to reduce the tax burden on small cars from 28% to 18%. “We are hopeful that this proposal will revive the small car market, recognizing the needs of consumers at the lower end of the market,” Bhargava stated, awaiting final approval from the GST Council. Currently, automobiles face a 28% GST plus a compensation cess of 1–22%, resulting in total taxes of up to 50% for SUVs, while electric vehicles are taxed at 5%.
Highlighting the struggles of India’s small car segment, Bhargava drew parallels with Japan’s 1950s introduction of Kei cars—smaller, lightly taxed vehicles with relaxed safety regulations—to address affordability for two-wheeler users. He argued that similar measures could help India’s large two-wheeler-dependent population transition to safer, more comfortable cars. Bhargava also advocated for tax incentives across all clean vehicle technologies, noting that in markets like Europe and the US, electric and hybrid vehicles receive comparable tax treatment to encourage sustainability. “Any technology that reduces oil consumption and pollution should be incentivized,” he said, aligning with India’s net-zero goals.
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Additionally, Bhargava addressed the global shortage of rare earth magnets, calling it a “warning signal” but expressing optimism due to government interventions, including a recent free trade agreement with the United Kingdom. He highlighted Maruti Suzuki’s strengthened partnership with Suzuki Japan, with biannual board meetings to enhance collaboration. As India faces global trade tensions and domestic economic challenges, Bhargava’s remarks underscore the urgency of unified action and strategic reforms to bolster the automotive industry and the broader economy.
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