New Delhi, Nov 17 || India’s GST 2.0 reforms, customs duty changes, and the India–Japan Free Trade Agreement (CEPA) are collectively reshaping the competitiveness and future trajectory of the country’s automotive industry, backed by $43.3 billion in cumulative Japanese investments, according to an industry report released on Monday.
The report by Grant Thornton Bharat and the Indo-Japan Chamber of Commerce and Industry (IJCCI), titled ‘Navigating change: GST 2.0, customs, and FTA impacts on the India–Japan auto sector,’ states that the rollout of GST 2.0 in September marked a pivotal shift for India’s automotive sector, streamlining tax structures, enhancing affordability, and catalysing consumer demand across vehicle segments.
Under the revised GST regime, small cars and motorcycles under 350cc now attract 18 per cent GST, down from 28 per cent plus cess, resulting in price reductions of up to Rs 1 lakh for select models. Premium vehicles, including SUVs and high-end motorcycles, now face a flat 40 per cent GST, while electric vehicles continue to benefit from a 5 per cent GST, reinforcing support for green mobility.