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GST Cuts Power Rebound in India’s Retail Credit as Vehicle and Durable Loans Surge

TransUnion CIBIL links the pickup to improved affordability, with supply tilting toward semi-urban and rural borrowers alongside early stress in micro-LAP and two-wheeler loans.

Overview

  • TransUnion CIBIL’s Credit Market Indicator rose to 99 in Q2 FY25 from 98 in the prior quarter, with the demand pillar at 95 versus 93 a year earlier.
  • Category demand jumped year-on-year in October: consumer durables to 189 from 128, two-wheelers to 272 from 249, and auto loans to 133 from 115, with festival-period durable loan demand about one-and-a-half times last year.
  • The supply CMI climbed to 97 in Q3 2025 from 91 a year earlier, driven by consumption loans excluding cards and gold loans, as secured lending regained momentum.
  • Semi-urban and rural markets accounted for 61% of credit supply in the September quarter, reflecting a geographic shift in lending activity.
  • Delinquencies increased in select segments, with two-wheeler 90+ day past-due rates up 0.22 percentage points to 2.2% and micro-LAP up 0.45 points to 3.3%, even as overall asset quality remained stable.