TL;DR
India's auto sector saw a dramatic turnaround in 2025, with sales surging in the latter half of the year due to GST reforms and increased consumer demand.
The Indian automobile industry experienced a year of dramatic contrasts in 2025, transitioning from a challenging first half marked by stagnant sales to an unexpected and powerful surge in demand during the latter part of the year. This significant turnaround was primarily triggered by a major policy intervention: a reset of the Goods and Services Tax (GST) framework announced on August 15th.
The GST reforms led to lower vehicle prices, sparking a dramatic revival in demand that began in September and culminated in record-breaking sales figures by October, with momentum sustained through November. October 2025 emerged as a landmark month, with vehicle retail sales hitting an all-time high of over four million units, significantly boosted by passenger vehicles and two-wheelers. This surge, driven by pent-up demand, reduced prices, and strong festive sentiment, underscores a robust recovery for the sector.
