Commodity storm claws back 30% of GST cut gains for Indian automakers
Post-September GST cut of 10 percentage points fueled record FY26 sales—two-wheelers up 11%, PVs up 8%—but West Asia conflict triggered 40-50% QoQ commodity inflation. Automakers pushing 1-3% price hikes, trimming discounts, and localizing suppliers; M&M reviewing ₹1.06 trillion supply chain across 100,000+ parts.
What happened
Indian Auto Industry · Automakers absorbing commodity cost surge post-West Asia war, with modest 1-3% price hikes eroding gains from September GST cut that
Key facts
- GST cut 10 percentage points
- FY26 two-wheeler sales +11%
- FY26 PV sales +8%
- price hikes 1-3%
- 30% of GST cut negated
- 40-50% commodity inflation QoQ
- EV 2W sales +22% to 1.4 million units
- M&M supply chain review ₹1.06 trillion, 100,000+ parts
Why this matters
M&M's ₹1.06 trillion supply chain review signals an M&A and JV window in component localization—target tier-2 suppliers with raw material hedging or India-based capacity to ride the reshoring wave.