The math doesn't quite add up for the average Indian shopper anymore. A year since the GST slab rationalisation, the initial relief has been swallowed by creeping inflation. While the tax structure simplified, the price tag on daily essentials hasn't stayed put. The result? A 2-3% net benefit that feels less like a windfall and more like a rounding error.
Automobiles tell a different story. This sector emerged as the clear winner, with retail sales hitting 29 million units in the 11 months ending August 2026, a 20% jump from the previous year. ICRA’s Jitin Makkar noted a "notable consumption sentiment boost." The Mahindra Scorpio-N Z2 dropped from ₹13.9 lakh to ₹13.2 lakh in September 2025, but by August 2026, it had crept back up to ₹13.6 lakh. Siam’s Rajesh Menon admitted that while demand remains healthy, last month’s growth leaned on a lower base from the prior year.
Fast-moving consumer goods (FMCG) saw a more mixed bag. Initial price cuts of around 10% on essentials taxed at 5% were quickly clawed back. Parle Products CMO Mayank Shah said consumers are still better off by 2-3%, but warned of another round of hikes closer to Diwali if raw material and energy costs keep climbing. Equirus Securities analyst Ronak Shah called it an "affordability boost" rather than a demand surge, noting that mid-to-high single-digit price increases diluted the original gains.
Apparel and hotels fared worse. Clothing above ₹2,500 moved from 12% to 18% GST, squeezing festive wear margins. Rahul Mehta of the Clothing Manufacturers Association of India expects costs to rise 8-10% this festive season, with consumer prices up 5-7%. Mid-market hotels, shifted from 12% GST with input-tax credit to 5% without it, are seeing margins compress as key inputs remain taxed at higher rates.