New Delhi, September 22 (Daily Kiran) : The Federation of Automobile Dealers Associations (FADA) has reported a remarkable increase in the Indian auto retail sector, attributing a fourfold growth rate to the implementation of GST 2.0. Sai Giridhar, the president of FADA, stated on Tuesday that this surge is significantly driven by enhanced vehicle affordability.
On the first anniversary of GST 2.0, Giridhar revealed that over 30 million vehicles were registered in India from October 2025 to August 2026, marking an annual growth rate of nearly 20%. This is a substantial increase compared to the previous year, when growth during the same period was below 5%.
According to Giridhar, GST 2.0 has permanently reduced the on-road costs of vehicles popular among a broad consumer base, including small cars, commuter two-wheelers, tractors, and commercial vehicles. This has not only stimulated demand but also led to a genuine expansion of the market.
He emphasized that the key to this rapid growth is one word: affordability. The policy changes have encouraged first-time buyers and those who had been postponing purchases to return to showrooms.
Giridhar noted that the strong demand observed during the last festive season is not merely seasonal but is becoming the new normal for the industry. He asserted that the impact of GST 2.0 is structural rather than cyclical, as evidenced by the auto industry recording its strongest sales months across various categories.
He highlighted that two-wheelers, often seen as a key indicator of widespread consumer demand, have regained their highest levels since 2018. In the passenger vehicle segment, alternative fuel vehicles have now outpaced petrol vehicles for the first time, with rural markets growing faster than urban ones in several categories.
Giridhar credited the government led by Prime Minister Narendra Modi for initiating a new cycle of consumption and growth in the auto sector, focusing on making vehicles more affordable. However, he acknowledged that manufacturers still face challenges related to fluctuations in crude oil prices, commodity costs, and currency exchange rates.
He concluded, “The biggest lesson from the past year is that affordability is the most powerful tool for driving demand.”
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