Three months since the implementation of the Goods and Services Tax (GST 2.0) reforms, both the automobile and fast-moving consumer goods (FMCG) sectors have seen pent-up demand. At the same, players believe that the full impact of the GST reforms is expected to reflect in the coming months.
FMCG companies said that once the transition-related trade issues stabilised, they began witnessing some uptick in demand post the GST rate cuts. However, they expect to witness a stronger rebound in sales with the positive impact of GST cuts likely to fully reflect in terms of volume in the coming months.
“We began witnessing better offtake in demand from November onwards after the transition period post the GST rate cuts stabilised. However, the FMCG industry is expected to witness the full impact of the GST rate cuts in the March quarter,” Vice-President of Parle Products told businessline.
As per some estimates, the packaged food segment witnessed 8-9 per cent year-on-year (YoY) in terms of value growth in the December quarter but this is expected to be higher at 12-13 per cent in the March quarter, he added.
In a recent interaction with businessline, Chairman and Managing Director, Nestle India also said that GST rate cuts have positively impacted the company’s businesses, and on certain products the price drop has been very large.
“I think GST rate cuts came at the right time. Looking at factors such as the short-term commodity outlook and the positive impact of the GST rate cuts, one is likely to see better volume growth across the categories,” he said.
A report released by Nuvama Institutional Equities on Wednesday noted that benefits of higher grammage were reported in November–December as initially FMCG companies were focused on clearing old packaging material. Therefore, November and December outpaced October in terms of demand.
“Companies have seen normalised inventory levels November onwards, post-trade disruptions in September-October due to product repricing and packaging changes. As GST benefits are increasingly passed on to consumers, companies anticipate a strong rebound in sales with the positive impact of GST cuts likely to reflect in volumes going forward,” the report added.
Similarly, in the automobile sector, the original equipment manufacturers (OEMs) said that due to the announcement of GST reforms right before the third quarter (Q3), the companies made several new records.
“For Tata Motors Passenger Vehicles, the momentum sparked by the rollout of GST 2.0 in late Q2 FY26 gained further traction in Q3, resulting in several new records. We achieved our highest-ever quarterly wholesales (dispatches to dealers) of 1,71,103 units, while retail sales/ registrations crossed the coveted two-lakh units milestone for the first time,” MD and CEO, Tata Motors Passenger Vehicles, said.
Nexon led the charge as India’s top-selling car/ SUV in October and November and is on track to retain this leadership for Q3 FY26, with sales of around 64,000 units, he said adding that Punch dominated its segment and Tiago delivered robust growth, reinforcing its preference among hatchback favourites.
“We continue to see the positive impact of tailwinds. For the next year, the industry is expecting 6 to 7 per cent growth,” Senior Executive Officer, Marketing and Sales, MSIL, told businessline.
He said the company saw pent up demand during the October-December quarter because after GST reduction announcement on August 15, customers were holding their purchases.
In the commercial vehicles too, the sales momentum ignited by GST 2.0 and the festive surge in Q2FY26 continued into Q3FY26, driving growth and lifting overall sentiment of the commercial vehicles industry.
“Going forward, we expect demand to strengthen in Q4FY26 across most commercial vehicle segments. Key drivers in 2026 will include the government’s sustained infrastructure push and expansion in end-use sectors, both of which are expected to fuel positive momentum for the industry. With an optimised portfolio ensuring superior product availability, a decisive pricing strategy and deeper customer engagement through intensified market activations, Tata Motors is well-poised to unlock demand across segments, paving the way for continued success,” MD & CEO, Tata Motors, said.
