India's GST Cut Spurs $68B Festival Shopping Surge

India's government, led by Prime Minister Narendra Modi, implemented a sweeping Goods and Services Tax (GST) cut across nearly 400 product categories to counteract the impact of a 50% US import levy and stimulate domestic consumption. The tax reduction, the first in nearly a decade, triggered an 8.5% year-on-year surge in consumer spending during the festival period between Navratri and Diwali, totaling over 6 trillion rupees ($67.6 billion). Automakers such as Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Hyundai Motor India experienced significant sales increases, with notable surges on auspicious days like Dhanteras, driven by more affordable prices and strong rural incomes. Maruti Suzuki even increased production, running lines on Sundays to meet the demand for entry-level models, while many first-time buyers upgraded from two-wheelers to cars. Beyond automobiles, sectors including jewelry, electronics, apparel, kitchenware, and financial services also saw robust growth, reflecting a broad-based consumption revival. Despite some concerns over slower income growth and labor market weaknesses, the tax cut appears to have reignited consumer confidence and economic momentum in India.