Overview

• HSBC projects that a cut in GST on most two‑wheelers from 28% to 18% could revive affordability and spur pre‑Diwali demand, with industry growth estimated at 6–8% CAGR through FY30.
• The Group of Ministers has proposed two core slabs of 5% and 18% and the removal of 12% and 28%, with reports indicating a possible 40% rate for select luxury goods that may include bikes above 350cc.
• Eicher Motors executive chairman Siddhartha Lal publicly urged a uniform 18% GST on all two‑wheelers, warning that higher taxes on larger bikes would shrink the >350cc segment and blunt India’s global competitiveness.
• HSBC estimates a GST‑driven 7–8% price reduction for ICE models, which would raise the break‑even point for EVs and weigh on near‑term demand at the lower end, even as EV GST hikes appear unlikely under a two‑slab system.
• The report sees domestic‑focused OEMs such as TVS and Bajaj benefiting from improved affordability, noting replacement purchases now account for 70–75% of sales versus a usual 40–45%.