Overview
- A year after the September 2025 GST rationalisation, initial price falls have been substantially offset as input, commodity and energy costs pushed consumer prices back toward pre-cut levels.
- The auto sector is the clearest beneficiary, with ICRA reporting retail sales of about 29 million units in the 11 months to August 2026, a roughly 20% year-on-year rise that reflects stronger demand and manufacturer dispatches.
- FMCG companies have increased prices by roughly 6–7% to cover higher raw-material, energy and logistics costs, and some firms say consumers remain only about 2–3% better off than before the reform.
- Certain changes produced uneven effects: GST on garments priced above ₹2,500 rose from 12% to 18%, and mid-market hotels shifted to a lower rate without input-tax credit, squeezing margins for businesses that still face taxed inputs.
- The political debate has sharpened, with Congress leaders saying inflation has neutralised the cuts and businesses warning of another round of price rises before the festive season if input-cost pressures persist.