India suggests reducing GST on small cars and insurance premiums, according to sources.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 18 2025
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Source: Reuters
Proposed Tax Cuts: India plans to reduce the Goods and Services Tax (GST) on small cars from 28% to 18% as part of broader consumption tax cuts announced by Prime Minister Narendra Modi.
Impact on Car Sales: The tax reduction is expected to boost sales for Maruti Suzuki, India's largest carmaker, which has seen a decline in market share and small car sales due to a shift towards larger SUVs.
Potential Changes to Insurance Tax: There are also discussions about lowering GST on health and life insurance premiums to 5% or possibly zero, down from the current 18%.
Timing of Announcement: The tax cuts, if approved, are anticipated to be announced before Diwali, which is a significant shopping season in India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
