GST Reforms Credited with Shielding Economy
Maruti Suzuki India Chairman RC Bhargava said the Goods and Services Tax (GST) reforms, often referred to as GST 2.0, have given a new impetus not only to the automobile industry but to several sectors of the Indian economy. Speaking at the company's annual general meeting, Bhargava noted that the Indian economy continues to perform well despite the impact of the West Asia war and other geopolitical challenges.
Bhargava highlighted that GST collections remain higher than ever before, calling the reform a necessary buffer that helped the country navigate an uncertain period. He credited Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, and all other members of the government for what he termed a "historical reform step."
"Without GST reforms, we may not have done so well in the difficult months that have elapsed," Bhargava said, recalling the optimism he had expressed about the auto industry after the reforms were introduced.
Market Outlook and Small Car Growth
Bhargava projected that the Indian passenger car market would grow to 6.1–6.3 million units by 2031. He also expects the small car segment to record significantly faster growth than it did in the previous five years, driven partly by GST rate reductions announced last September.
The chairman urged both the central and state governments to accelerate reforms, simplify business processes, and increase technology adoption to reduce delays and corruption. He also called for greater trust in private businesses and competition, arguing that faster wealth creation would support higher government revenues and more inclusive economic growth.
Manufacturing Expansion Across India
Maruti Suzuki is expanding its manufacturing capacity to prepare for stronger demand. The company expects its installed production capacity to reach 2.9 million vehicles by the end of fiscal year 2026-27 and 3.65 million units by fiscal year 2030-31.
At the Kharkhoda facility in Haryana, two production lines have already been commissioned, with work progressing on a third line. In Gujarat, Maruti has commissioned a fourth production line at its Hansalpur plant, raising the plant's annual capacity to 1 million vehicles. Bhargava described the Hansalpur facility as Suzuki's largest manufacturing plant anywhere in the world.
The company has also begun work at a new site in Sanand, Gujarat, where it plans to install a total production capacity of 1 million units. The proposed investment for the Sanand facility is about ₹35,000 crore.
Bhargava said the expansion of production capacity reflects the company's confidence in India's long-term economic growth potential.