The 65th Annual Conference of the Society of Indian Automobile Manufacturers (SIAM) turned out to be a pivotal moment for the Indian auto industry, coming just after a significant reduction in GST rates for vehicles. This change, which lowers the tax slab to 18% for passenger vehicles and two-wheelers below 350 cc, was met with widespread approval across the sector. Industry leaders welcomed the move, highlighting the direct benefit it brings to the common consumer—especially those eyeing small cars and compact SUVs.
Tarun Garg, COO of Hyundai Motor India, pointed out that the GST cut has led to a price drop of up to 13% in the small SUV segment. Maruti Suzuki, too, is optimistic, expecting double-digit growth in the small car market, thanks to more affordable price points that could attract first-time buyers during the festive season.
However, even as the industry celebrates, a major point of friction remains—the issue of compensation cess. While the GST reduction has provided relief, concerns were raised by the Federation of Automobile Dealers Associations (FADA), which wrote to the government warning that the e-credit ledger of dealers may be adversely affected. This could place an unexpected financial burden on both dealers and OEMs, especially at a time when the market is gearing up for high sales volumes during Navratri and Diwali. If unresolved, the confusion around cess could potentially result in a sales impact worth ₹2,500–4,000 crore, a risk the government has acknowledged publicly while promising a solution soon.
Another topic that stirred debate during the conference was the ethanol-blended E20 fuel. While the government has pushed for its widespread use as a cleaner alternative, skepticism has emerged among consumers and experts on social media, citing fears about reduced mileage and possible engine damage. Union Minister Nitin Gadkari, however, dismissed these concerns as misinformation allegedly fueled by the petrol lobby, and reaffirmed the government's commitment to expanding ethanol usage as part of India's green mobility mission.
The conference also took stock of India’s electric vehicle (EV) ecosystem, which remains sluggish despite heavy policy support. Despite incentives and subsidies exceeding ₹40,000 crore, EVs currently account for just 7.6% of total vehicle sales, far short of the government’s ambitious 30% target by 2030. Stakeholders agreed that while the intent is strong, infrastructure, pricing, and consumer confidence remain key roadblocks.
In conclusion, SIAM 2025 brought both optimism and urgency. The GST relief is a welcome boost to both buyers and sellers, and could drive a robust festive season for the auto sector. Yet, unresolved issues around cess, ethanol fuel debates, and the slow EV transition remind us that policy clarity and consumer trust will be essential if the industry is to maintain momentum in the years to come.
