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India Inc on Thursday welcomed the GST regime rejig that eases budgeting worries of families on the one hand and pep up domestic demand, just the thing that industry and services sector was looking for – expected to strengthen economic growth.
Welcoming the GST Council’s forward-looking decisions – moving to two tax slabs and simplification of refunds and MSME procedures, leading chamber CII said, “Industry firmly believes that these reforms will reinforce India’s growth trajectory and strengthen confidence among businesses and citizens. We stand committed to working with the Government in ensuring smooth implementation of these progressive measures for ease of business and living.”
CII Director General, Chandrajit Banerjee described the move on GST reform as “phenomenal” and said it will ease compliance, reduce litigation and give businesses and consumers the predictability they need.” By lowering rates on everyday items and critical inputs, the reforms provide immediate relief to families and strengthen the foundation for growth. Industry would swiftly pass on benefits to consumers and will partner with the government to ensure a smooth, timely rollout that lifts demand and supports jobs,” he said.
His colleague and Chairman, Economic Affairs, CII, R Dinesh said, the “The landmark decisions taken at the 56th meeting of the GST Council mark a decisive step towards simplification, affordability, and economic momentum. The sweeping reduction of GST rates on essential goods such as dairy products, medicines, and everyday household items, along with reforms in processes and institutional strengthening, will directly benefit consumers, the aspirational middle class, and industry alike. The consumption boost has the potential to start a virtuous cycle of growth.”
In particular, he said, the operationalisation of the Goods and Services Tax Appellate Tribunal and the adoption of risk-based refund systems will further enhance trust and ease of doing business, creating a more transparent and efficient tax environment. The biggest beneficiaries would be the MSMEs.
The FICCI too hailed the decisions taken at GST Council as landmark ones, and constitute a transformative step in India’s economic journey and usher in next-generation GST reforms..
The rationalisation of GST rates into a simplified two-tier structure (18% and 5%), with a special de-merit rate for select goods, is a consumer-focused and growth-oriented reform that will bring transparency, predictability, and stability to India’s tax system. It will directly benefit households, labour-intensive industries, MSMEs, and critical sectors such as healthcare, agriculture, infrastructure, and automobiles—reducing costs for consumers, providing relief to businesses, and boosting consumption-driven growth, the FICCI said.
FICCI President, Harsha Vardhan Agarwal said in a statement, “The simplification of the tax structure will offer multiple benefits. It will reduce classification disputes, improve compliance and address anomalies on account of inverted duty structure. While there are revenue implications of the announced measures as outlined by the government, the important point to note is the improvement in economic sentiments the reduction in rates will lead to and which in turn will boost consumption demand. This is a major positive for the economy both in terms of lifting growth and containing inflation.”
The reduction of GST rates on essential items and FMCG products such as soaps, shampoos, toothpaste, hair oil, bicycles, kitchenware, and packaged foods will ease household budgets and strengthen consumption. Lower rates on agricultural machinery, fertilizers, and inputs will reduce costs for farmers, enhance rural incomes, and support food security. Similarly, rate cuts on capital goods and industrial inputs will bring down manufacturing costs, improve competitiveness, and encourage fresh investments.
Relief to labour-intensive sectors like handicrafts, textiles, leather, footwear, marble, granite, and toys will strengthen MSMEs, safeguard traditional livelihoods, and create new jobs.
The automotive sector will gain from reduced rates on small cars, motorcycles, buses, trucks, and auto parts, boosting affordability and domestic manufacturing. Lower GST on cement, renewable energy devices, and construction materials will spur housing and infrastructure development, aligning with the Government’s vision of Housing for All and sustainable growth.
FICCI Senior Vice President, Anant Goenka, said “The changes announced by the GST Council will boost consumption, improve competitiveness of industry and enhance the ease of doing business particularly for small businesses.”
The other chamber, PHDCCI, described the rollout of GST rate rationalisation as landmark reform that addresses consumer welfare and revenue efficiency.
PHDCCI President, Hemant Jain said, “By reducing rates on daily essentials such as toiletries, packaged foods, and utensils from 18–12% to 5%, the reform will ease household budgets and stimulate demand. In agriculture, lowering GST on tractors, tyres, irrigation systems, and farm machinery to 5% will cut input costs and directly benefit farmers. Affordable access to healthcare—through Nil GST on insurance, medical oxygen, and diagnostic kits—marks a socially progressive step, while reduced levies on education items will strengthen human capital, the chamber chief said.
Former PHDCCI Chief Economist SP Sharma felt that the GST reforms would enhance India’s global competitiveness. By boosting demand and ensuring sustainable growth, they will help cushion the economy against geo-economic headwinds such as tariff troubles and slowing global demand trajectory. “ I believe these measures could add 30 to 50 basis points to India’s GDP growth in the current fiscal year 2025. Importantly, MSMEs stand to gain the most, with simplified compliance and reduced costs of compliances paving the way for more stronger growth,” Sharma said.
Bringing down GST on automobiles, appliances, and electronics will boost industry volumes and create multiplier effects in manufacturing and jobs. Welcoming these steps that simplify compliance, spur consumption, and ensure states gains from an expanded tax base, the PHDCCI said these will set India firmly on growth and inclusivity path.”
“These steps are welcome as they ease the conditions for some areas of industries but vast majority of MSMEs, especially in textiles, food processing and engineering, remain untouched by these changes,” rued K E Raghunathan, National Chairman, Association of Indian Entrepreneurs.
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