India’s consumption demand continues to hold firm, with strong momentum visible across both production and sales indicators in September 2025, even as consumers temporarily deferred purchases ahead of GST rate cuts, according to an analysis by Bank of Baroda.
As per the analysis by Bank of Baroda economists Dipanwita Mazumdar and Jahnavi Prabhakar, production of consumer durables, especially white goods like televisions and refrigerators, recorded double-digit growth, while daily consumables and mobility-related items also showed healthy upticks despite a period of abstention in the month due to tax transition.
The report highlighted that the Index of Industrial Production (IIP) disaggregated data pointed to robust performance in consumer durables. Production of televisions grew 11.4 per cent year-on-year in September 2025, building on a high base of 10.1 per cent, while refrigerator output surged 15.8 per cent after a contraction last year. Air conditioners posted a seasonally adjusted 11.3 per cent sequential jump, reflecting sustained discretionary spending despite a high base effect.
The report attributed this resilience to favorable pricing and optimism following GST 2.0 reforms, which lowered tax slabs for several consumer goods categories.
Retail auto sales data from the Federation of Automobile Dealers Associations (FADA) showed a 5.2 per cent year-on-year rise in September 2025, reversing an 8.6 per cent decline a year earlier.
Passenger vehicle and two-wheeler sales grew 5.8 per cent and 6.5 per cent, respectively, aided by GST rate rationalisation and festive demand.
“More than 60 per cent of total auto sales were recorded during the Navaratri period, with passenger vehicles and two-wheelers contributing 73 per cent and 65 per cent of total monthly sales, respectively,” the report highlighted.
The report mentioned that an analysis of 43 companies across auto, FMCG, retail, hotels, and durables showed encouraging sales and profitability trends in Q2FY26.
Auto firms recorded a 22.8 per cent rise in net sales, while retail and restaurant sectors grew 14.6 per cent and 15.6 per cent, respectively. FMCG companies posted an 8.1 per cent increase in sales, though some reported temporary disruptions due to inventory adjustments post-GST changes.
“Most companies expect the full benefit of tax reforms and deferred purchases to reflect in Q3 results,” the economists said in the report.
The report projects that demand revival will strengthen further in the coming months, supported by rural recovery following a good monsoon and rising urban consumption driven by tax-related reliefs.