Maruti Suzuki Chairman RC Bhargava has said the GST 2.0 reforms gave a major boost to India’s automobile industry while helping the broader economy remain resilient amid geopolitical and economic uncertainty linked to the West Asia conflict. Speaking at Maruti Suzuki India’s annual general meeting, Bhargava said the impact of the tax reforms had extended well beyond the auto sector. He pointed to strong GST collections and better than expected economic growth as signs that the reforms had helped India navigate a challenging period. According to Bhargava, the GST changes provided an important cushion at a time when the Iran situation and wider West Asia tensions were creating uncertainty for global markets.

He argued that without the reforms, India’s economic performance during the difficult months could have been weaker. The auto sector has been one of the major beneficiaries. Bhargava said the reduction in GST rates has improved the outlook for vehicle demand, particularly in the small car segment. After several years of relatively slow growth, smaller and more affordable cars could now see a stronger recovery. Maruti Suzuki has consequently revised its long term expectations for the Indian passenger vehicle market. Bhargava said the industry could grow to between 6.1 million and 6.3 million vehicles by 2031, with small cars expected to grow considerably faster than they did during the previous five years. To prepare for the anticipated rise in demand, Maruti is continuing to expand its manufacturing footprint.

The company expects its installed production capacity to reach around 2.9 million vehicles by the end of FY2026-27 and 3.65 million by FY2030-31. Maruti has already commissioned production lines at its Kharkhoda facility in Haryana and expanded capacity at its Hansalpur plant in Gujarat. Work has also begun at a new manufacturing site in Sanand, Gujarat, where the company plans to create capacity for around one million vehicles with a proposed investment of approximately ₹35,000 crore. Bhargava also called for governments to accelerate reforms, simplify business procedures and make greater use of technology to reduce delays and production costs. He stressed that stronger economic growth and wealth creation would ultimately help generate employment and strengthen government revenues. His remarks come as India’s automobile industry enters a potentially stronger growth phase, with tax reforms, rising demand and increased manufacturing capacity expected to support the sector in the years ahead.