Festive Demand Rebounds on GST 2.0 Cuts: Icra
Rating agency says consumer durables see strong uptick after GST rejig, but sustainability hinges on broader economic conditions.
Domestic rating agency Icra on Monday said early festive season trends indicate a rebound in demand—particularly for consumer durables—following GST 2.0 rate cuts that have eased the tax burden on consumers. However, it cautioned that sustaining this momentum will depend on broader economic conditions and sector-specific factors in the coming quarters.
Since its rollout in 2017, the Goods and Services Tax has undergone several adjustments, culminating in a major restructuring in September 2025. The GST 2.0 reforms, effective from September 22, delivered substantial rate cuts across a wide range of goods and services. Icra said the combination of rate reductions, pent-up demand and an early festive onset boosted sales in September–October, which is expected to support manufacturing output in October as well.
The agency noted that while GST rationalisation may continue to aid demand for everyday or small-ticket items beyond the festive period, the durability of demand for big-ticket products remains uncertain. The overhaul aims to make consumer prices more affordable, reduce business operating costs and stimulate demand across essentials, housing materials, automobiles and services, it added.
