India’s sweeping GST rate cuts are set to spur consumption and unlock a fresh wave of private capex, industry leaders told CNBC-TV18, calling the move a timely boost ahead of the festive season.Naina Lal Kidwai, Past President of FICCI, said the shift to a simpler two-slab GST structure would cut confusion and disputes while driving demand.“If consumption goes up, capacities of industry get filled, and therefore capex goes up,” she noted, adding that the two-tier simplification “is definitely cause for celebration.”
Anant Goenka, Senior Vice President of FICCI and Vice Chairman of RPG Group, said the timing couldn’t be better. With the new rates kicking in on September 22, he expects demand to spike in the final week of the month, followed by Diwali and the wedding season.
“Putting 10% in the hands of the customer is a huge amount when many duties are dropping from 28% to 18%. It will make a big difference in demand going forward,” he said.He added that companies are committed to passing on the full benefit to consumers, though some inventory in trade channels could cause short delays. For FMCG products like ₹1 sachets, which cannot be repriced easily, firms may instead reflect the benefit through higher volumes.Manish Sharma, Chairman of Panasonic Life Solutions India & SA, said the cascading effect of GST cuts would bring down consumer durable prices by 7–7.5%.Calling the reform an “unlock,” he said it could accelerate penetration in categories like air conditioners, where ownership remains just 7.5% in India. “This is going to be a significant milestone when we look back after a few years,” Sharma said.He added that narrower tax gaps would encourage consumers to upgrade to larger TVs and more energy-efficient appliances. Crucially, Sharma said the reforms would nudge fence-sitters into showrooms sooner—boosting demand while supporting domestic electronics manufacturing through economies of scale.Watch the video for moreFirst Published: Sept 4, 2025 9:36 PM IST
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