GST 2.0 helped Indian economy withstand West Asia turmoil, says Maruti Suzuki Chairman RC Bhargava

Maruti Suzuki India Chairman RC Bhargava has credited GST 2.0 with providing a cushion to the Indian economy during a period marked by the Iran crisis and wider West Asia conflict. Speaking at the company's annual general meeting on Monday, Bhargava said the tax reforms had supported activity across sectors and prompted Maruti Suzuki to reassess its long-term growth plans.

GST boosts growth

Bhargava said the Indian economy has continued to perform strongly despite external challenges, while GST collections have reached record levels. He attributed part of this resilience to the GST rate cuts introduced in September last year.

"The Indian economy continues to do well, and collections of GST remain higher than ever before. This is all despite the Iran problems, the West Asia war, and such issues. I do believe that without GST reforms, we may not have done so well in the difficult months that have elapsed," Bhargava said.

He added that the impact has extended beyond the automobile industry, with national GDP growth also exceeding forecasts made by several agencies.

"This happened. I'm happy to inform you that these reforms have given a new impetus not only to the automobile industry but to several sectors of the economy. National GDP growth figures have been better than forecast by most agencies."

Car market outlook revised

The stronger outlook has led Maruti Suzuki to revisit its expectations for India's passenger vehicle market. Bhargava said the company is working on a more precise five-year market estimate, which could result in changes to its production and sales plans.

"This could lead to some changes in our long-term production and sales targets. Today, we are estimating that the car industry will grow to 6.1 million to 6.3 million by 2031, and that the share of the small car market will grow significantly faster than what had happened in the last five years," Bhargava noted.

The company expects small cars to benefit particularly from the GST changes, reversing the slower pace of growth seen in the segment over the previous five years.

Capacity expansion continues

Maruti Suzuki is expanding manufacturing capacity to prepare for higher demand. Bhargava said total installed capacity is expected to reach 2.9 million units by the end of 2026-27 and 3.65 million units by the end of 2030-31.

At Kharkhoda in Haryana, two production lines have already been commissioned, while work on a third is underway. In Gujarat, Maruti has commissioned a fourth line at Hansalpur with an annual capacity of 2.5 lakh units, taking the plant's total capacity to 1 million units.

"A fourth line of 2.5 lakh units capacity was commissioned in Hansalpur in Gujarat, raising total capacity to 1 million. This is Suzuki's largest plant anywhere in the world," Bhargava said.

Construction has also begun at a new manufacturing site in Sanand, Gujarat. Maruti plans to establish 1 million units of annual capacity there, with a proposed investment of about ₹35,000 crore.

Call for faster reforms

Bhargava also urged governments to continue simplifying business processes, expand technology use and encourage competition to reduce production costs and delays. He called on political parties to support reforms that can improve competitiveness and employment.

"Please consider this as a national task, because the strength of India in all global matters will lie in its economic strength," he stated.

(With inputs from PTI)

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