FADA Projects Up to 12 Percent Growth for Auto Sector in FY27 Following GST Rate Cuts

The Federation of Automobile Dealers Associations (FADA) has projected that the Indian automotive sector could record up to 12 percent growth in the ongoing financial year. According to FADA CEO Saharsh Damani, sustained ground traction following the implementation of GST rate cuts last year is driving the positive outlook for the industry.

Speaking to PTI on Monday, Damani stated that rural demand for passenger vehicles is continuing to outpace urban demand. He added that all automotive segments are expected to outperform during the upcoming festival season, strengthening the expectations for the second half of the fiscal year.

FADA is targeting an overall sectoral growth ranging between 9 and 12 percent for the full financial year ending March 2027. However, Damani noted that the industry is closely monitoring performance metrics following the one-year anniversary of the GST 2.0 rate cuts, which were announced on September 22 last year.

"The base for the last six months compared to six months of last year was very low, and therefore we have seen extremely good growth coming in during the first six months," Damani told PTI. He explained that growth figures moving past September 22 will serve as a critical benchmark for the industry's sustained momentum.

With positive consumer traction observed on the ground, automotive dealers remain optimistic about maintaining steady performance heading into the second half of the financial year beginning in October.

"The projection of double-digit growth by FADA highlights the resilience of domestic consumption, particularly driven by rural demand. For entrepreneurs and businesses operating within the broader automotive and supply chain ecosystem, this sustained momentum signals stable market opportunities. However, as the industry moves past the low-base effect of previous quarters, businesses must closely track post-September metrics to ensure long-term operational sustainability rather than relying solely on short-term policy catalysts." — Dr. Shishir Gupta, Founder & CEO, StartupLanes