Industry leaders across India celebrated the Goods and Services Tax (GST) Council’s transformative decision to overhaul the GST regime, effective September 22, 2025, describing it as a pivotal move to ignite consumption and counter the economic pressures from U.S. tariffs. The council simplified the tax structure from four slabs to two—5 percent and 18 percent—slashing rates on essentials, fast-moving consumer goods (FMCG), and sectors like automobiles and healthcare, aligning with the festive season to maximize economic impact.

Ashok P Hinduja, Chairman of Hinduja Group of Companies (India), praised the GST rate cuts as a vital booster for macroeconomic stability, noting their potential to stimulate grassroots demand and create a cascading positive effect on upstream and downstream sectors. This reform, he argued, provides a critical buffer against the “lopsided” U.S. tariff regime, which imposes a 50 percent levy on Indian exports. Anand Mahindra, Chairman of Mahindra Group, took to X to advocate for continued reforms, stating, “More and faster reforms are the surest way to unleash consumption and investment,” emphasizing their role in amplifying India’s global economic influence.

FICCI President Harsha Vardhan Agarwal highlighted the streamlined tax structure’s benefits, including reduced classification disputes, improved compliance, and correction of inverted duty structures. He predicted a significant uplift in economic sentiment, boosting consumption and curbing inflation. Similarly, CII Economic Affairs Council Chairman R Dinesh described the rate reductions on dairy, medicines, and household items as a catalyst for a “virtuous cycle of growth,” benefiting consumers, the middle class, and industries.

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Rajneesh Kumar of Flipkart Group noted that the timely implementation ahead of Navratri will enhance market access and accelerate India’s journey toward a Viksit Bharat. Ashishkumar Chauhan, MD & CEO of NSE, underscored the reforms as building on the historic foundation of GST’s 2017 introduction, fostering a transparent and efficient tax regime. Aditi Nayar, Chief Economist at ICRA Ltd, observed that while GST collections showed mixed growth, with CGST and SGST rising robustly but IGST lagging, the low inflation environment supports the consumption boost.

Nitin Rao of InCred Wealth emphasized the reforms’ focus on supporting tariff-impacted, labor-intensive industries, projecting a significant GDP growth increase, as historical trends suggest. Sadaf Sayeed of Muthoot Microfin highlighted the synergy of fiscal and monetary policies, noting that the Reserve Bank of India’s recent 50-basis-point rate cut, combined with GST rationalization, will drive consumption and sustain economic momentum. Ahmed Abdel Wahab of Mars Wrigley India welcomed the shift of FMCG products like chocolates to the 5 percent slab, anticipating rapid industry responses through restored value packs, new formats, and enhanced retailer support.

The GST 2.0 reforms, with an estimated fiscal impact of ₹48,000 crore, are poised to enhance household purchasing power, stimulate demand, and fortify India’s economic resilience against global trade disruptions, positioning the nation for sustained growth.

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