New GST 2025: Impact on Stock Market and Indian Economy
Overview of GST 2025
The Government of India has announced a historic overhaul of the GST structure, effective 22 September 2025. This move simplifies the tax regime, reduces burden on consumers, and creates a consumption-friendly environment just before the festive season.
New GST Slabs Explained
| Category | Old GST | New GST (2025) |
|---|---|---|
| Essentials (food, soap, paste, dairy) | 12–18% | 5% or 0% |
| Electronics (AC, TV, Dishwasher) | 28% | 18% |
| Mobiles & Laptops | 18% | 18% (unchanged) |
| Insurance (Life & Health) | ~12% | 0% (GST abolished) |
| Automobiles (cars, tractors) | 28% + cess | 18% |
| Electric Vehicles | 5% | 5% (unchanged) |
| Sin / Luxury Goods | 28% + cess | 40% |
Stock Market Impact
The stock market welcomed GST 2025 reforms with positivity:
- Nifty 50: Gained +0.53% to 24,845 points.
- Sensex: Rose +0.55% to 81,014 points.
- Nifty Auto & FMCG: Outperformed, gaining 2.5% and 1.7% respectively.
Sectoral Winners
Automobiles: M&M +6%, Eicher Motors +3%.
FMCG: Britannia, Colgate, Nestle, HUL, Dabur up 2–6%.
Insurance: ICICI Prudential, LIC +6% after GST abolishment.
Cement: UltraTech, Ambuja Cement +4% intraday.
Sectoral Losers
Not all sectors benefited equally:
- Power & Coal: GST hike from 5% to 18% hurt Tata Power, JSW Energy (–1%).
- IT & Defence: Fell 0.5–1.5% due to muted GST benefit.
Long-term Implications
Experts suggest GST rationalisation could boost GDP by 1–1.2% in the next 4–6 quarters. Lower taxes on essentials and durables will revive consumption demand, especially during festivals. Companies passing benefits to consumers may see improved earnings momentum in Q3/Q4.
📌 Related Reading: Stock Market Tools Hub India 2025 | Latest Pre-Market Report
Frequently Asked Questions (FAQs)
1. When will the new GST rates be effective?
From 22 September 2025 (Navratri onwards).
2. Which items are GST free now?
Paneer, roti, life-saving medicines, and insurance policies are now tax-free.
3. Which sectors benefit the most?
Automobile, FMCG, Insurance, and Cement sectors see maximum positive impact.
4. Which sectors face challenges?
Power, coal-based companies, IT and defence stocks faced short-term decline.
5. What is the highest GST rate?
A new 40% GST slab applies to luxury & sin goods like tobacco and high-end cars.
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