GST 2.0 Ignites Festive Boom: India’s Auto Retail Heads for Record-Breaking Dhanteras and Diwali Sales

India’s automobile retail sector is cruising into what industry leaders describe as its “most buoyant” festive season ever, with the twin impact of GST 2.0 tax reforms and festive demand expected to propel sales to record highs, according to the Federation of Automobile Dealers Associations (FADA).

Reflecting on the September 2025 retail performance, FADA Vice President Sai Giridhar said the month was unlike any other in recent memory. 

“The first three weeks were muted, as buyers waited for the new GST regime. But once the rate cuts came into effect during Navratri, sentiment flipped overnight,” he note, adding, “Dealers witnessed a massive surge in bookings and deliveries, turning September into a 5.22 per cent year-on-year growth story.”

While two-wheelers, passenger vehicles, tractors and commercial vehicles posted strong gains, segments like three-wheelers and construction equipment faced “temporary headwinds” due to “uneven rains” and “project slowdowns”. Yet, the overall momentum marked a defining turnaround for India’s retail auto ecosystem, according to FADA. 

Giridhar described Navratri 2025 as a “milestone moment” for the industry — a period when policy and sentiment converged. “It was truly a ‘Bachat Utsav’ for consumers,” he said, crediting the GST 2.0 reform announced by Prime Minister Narendra Modi for unleashing “never-seen-before” retail enthusiasm. 

Also Read: Festive Fervour And GST 2.0 Propel Passenger Vehicle Sales To New Highs | Republic World

During the nine-day festival, overall vehicle retails soared by 34 per cent year-on-year, led by a 36 per cent rise in two-wheeler sales and nearly 35 per cent in passenger vehicles.

According to FADA, India is now poised for its most spectacular 42-day festive run, spanning Navratri to Deepawali. Analysts point to a rare confluence of “economic and environmental positives” — from a strong kharif harvest and above-normal monsoon to stable policy rates and lower taxes — all of which are enhancing affordability and consumer confidence across urban and rural markets alike.

The auto retail body claimed that showrooms nationwide are already witnessing record enquiries and advance bookings, particularly in the two-wheeler and passenger vehicle segments. Affordable post-GST pricing, aggressive OEM offers, and easier financing have drawn a wave of first-time buyers, while existing owners are upgrading to premium models, signalling renewed aspiration within India’s growing middle class.

If supply chains keep pace, the coming weeks could see the highest-ever festive auto retail volumes in India’s history, as per FADA.

With optimism running high and dealerships geared up for Dhanteras and Deepawali, the auto retail industry enters October with confidence that this festive season will not only light up homes, but also reignite the nation’s mobility dreams.