Business
GST rate cuts a booster shot! What do tax changes mean for stock markets? Explained – The Times of India
GST rate cuts announced by the Modi government have served as a booster shot for the Indian economy and markets, with consumption driven growth expected to aid the economy at a time when it is faced by 50% US tariffs.The comprehensive GST modifications announced by Finance Minister Nirmala Sitharaman, with revenue implications of Rs 48,000 crore, have been regarded by market analysts as a “consumption revival bombshell” that has energised the previously sluggish Sensex and Nifty, according to an ET analysis.
The market’s immediate reaction was significant, with the Sensex recording an increase of nearly 900 points, whilst the Nifty advanced by 1%, approaching a potential breakthrough above the critical 25,000 mark. These movements have sparked considerable interest in understanding the specific changes and their implications for the market.Speaking about the wider implications, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, states: “The revolutionary GST reform has come better than expected benefitting a wide spectrum of sectors. The ultimate beneficiary is the Indian consumer who will benefit from lower prices. The potential big boost to consumption in an economy that is already in growth momentum will be big and may surprise on the upside.“Also Read | GST rate cuts from September 22! All you need to know about new tax rates for items – 75 FAQs answered
GST rate cuts: Auto sector a big beneficiary
The surge in automotive shares aligns with substantial tax benefits. According to Jefferies, the reduction in GST rates from 28% to 18% for two-wheelers below 350cc and small cars could trigger significant market growth, benefiting companies like TVS and Maruti. For M&M, the unexpected reduction in SUV taxation from 50% to 40%, including cess, presents a remarkable advantage.The rural market segment shows promising developments. Emkay’s study indicates that “tractors and agri-machinery that have witnessed a GST cut to 5% from 12%” will experience considerable demand growth. “Such sharp reduction directly lowers acquisition costs for farmers and boosts affordability,” presenting substantial opportunities for organisations like Mahindra & Mahindra and Escorts.According to the research organisation, “this strategic tax relief in the auto space could potentially offer a 5-10% boost in demand across categories,” explaining the current market momentum in automotive shares.In the stock market, automotive shares showed remarkable performance, with M&M recording a notable 6% increase. Other manufacturers including Eicher Motors, TVS, Bajaj Auto and Hero Moto experienced gains between 1-2%.
FMCG booster
The FMCG sector emerges as the second-largest beneficiary of the tax reduction, receiving more comprehensive relief than anticipated. According to Amit Agarwal, SVP-Fundamental Research at Kotak Securities: “The GST rate for almost all food items (biscuits, instant noodles, nutrition, namkeen, instant coffee, chocolates, ice cream, fruit juices, sauces and cheese) has been cut to 5% from 18%/12% and that for select daily essential personal care categories (soaps, shampoo, hair oil and toothpaste) has been reduced to 5% from 18%.“Jefferies indicates this development was “largely unanticipated,” resulting in “positive for consumer staples companies, notably Colgate, Britannia, Nestlé, followed by HUL, GCPL, Marico, Dabur, Patanjali.” The extensive range of products affected explains the increased investor attention towards FMCG stocks.Also Read | GST rate cuts bonanza! What is cheaper and dearer? Check full list of items in 0%, 5%, 18% & 40% slabs
Cement sector rejoices
The cement industry benefits from a substantial GST reduction of 10 percentage points, decreasing from 28% to 18%, addressing persistent investor worries. Jefferies elaborates on the significance: “The reduction in GST rate by 10ppt creates some volume upside but potentially also headroom for price hikes, where the sensitivity of the industry to a profit increase is high (1% pricing is 4-5%).”The combined advantages of increased volume and pricing flexibility explain why analysts predict an upturn in cement stocks, which have remained relatively stable until now.
GST rate cuts: Impact on Indian economy
The GST reforms carry significant implications beyond sectoral advantages, contributing to broader economic momentum. As Garima Kapoor, Economist and Executive Vice President at Elara Capital, states: “We expect GST related demand boost to add 100 to 120 bps to the GDP growth over next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to US.”According to Dr. Vijayakumar’s assessment, these changes could “boost India’s growth to 6.5% in FY 26 and perhaps 7% in FY 27 with impressive gains in corporate earnings,” establishing solid foundations for continued market advancement.The implementation arrives at an opportune moment as various policy instruments demonstrate positive alignment. As noted by Kapoor: “Today’s GST rate changes, along with RBI’s rate cuts, income tax rebates announced in FY26 budget and easing inflation are all levers for a consumption uptick in the economy. We remain constructive on the uptick in consumption demand in the economy as multiple policy levers turn favourable for the first time in a decade.“Nilesh Shah, MD of Kotak Mahindra AMC, indicated that the GST restructuring would help counterbalance the negative effects of US tariffs in subsequent quarters.Also Read | Prices of small cars, two-wheelers under 350cc, to come down significantly on GST cut; bigger cars in 40% slab
GST rate cuts: What should investors do?
The stock market responded favourably as investors recognised how reduced GST rates could boost consumer demand across various sectors. Jefferies anticipates “festive demand should see a positive boost,” whilst cautioning about “some negative demand impact in September.”The projected increase in consumption could generate cascading benefits for broader economic expansion. Analysts emphasise that swift transfer of tax benefits to consumers by companies would be crucial, potentially enhancing both consumer confidence and expenditure.“Lower taxes on essentials, FMCG products, autos and cement will leave consumers with more money in hand. This should directly boost demand, help traders and businesses see higher volumes, and may even favourably impact next quarter’s earnings. It also carries the potential to ease inflation.” said Shripal Shah, MD & CEO, Kotak Securities.These wide-ranging tax adjustments, encompassing both everyday necessities and substantial purchases, have led investors to consider this a fundamental transformation rather than a short-term measure. This perspective has driven widespread market gains across diverse sectors including automobiles, FMCG, white goods, cement, and insurance.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
Business
70% of adults without a licence say learning to drive is unaffordable
Some seven in 10 British adults without a full driving licence say learning to drive is currently unaffordable, according to a survey.
The figure is even higher among younger people, with 76% of 18 to 29-year-olds without a licence saying driving lessons are financially out of reach, the poll for car insurer Prima found.
Overall, 38% said the cost of driving lessons was the biggest deterrent to learning to drive.
Some 32% were put off by the price of buying a car and 15% said the cost of car insurance was the main barrier to learning to drive.
Almost half (45%) said they would consider learning to drive if it became significantly cheaper.
Nick Ielpo, UK country manager at Prima, said: “For a growing number of people, driving is no longer a symbol of freedom – it’s a financial stretch too far.
“Between lessons, buying a car and insuring it, the upfront and ongoing costs are pricing many people out before they even start.”
Find Out Now surveyed 1,134 adults who do not hold a full driving licence between January 21 and 23.
Business
Go Digit General Insurance gets GST demand notice of Rs 170 cr – The Times of India
Go Digit General Insurance on Saturday said it has received a demand notice of about Rs 170 crore for short payment of goods and services tax (GST) for nearly five years. The company has received an order copy from the Office of the Commissioner of GST & Central Excise, Chennai South Commissionerate on March 6, confirming GST demand of Rs 154.80 crore levying penalty of Rs 15.48 crore and Interest u/s 50 of CGST Act, 2017 for the period July 2017 to March 2022, the insurer said in a regulatory filing. The company is in the process of evaluating the legal advice on the implications and would file an appeal, it said.
Business
Iran war threatens $11.7 trillion global travel industry as passengers get caught in crossfire
Zoey Gong, a Chinese medicine food therapist, was days away from boarding an Emirates flight from Paris to Shanghai via Dubai, United Arab Emirates, when the U.S. and Israel attacked Iran last Saturday.
Gong, 30, had her flight plans derailed as a result, and she told CNBC that she had to pay $1,600 to get to Shanghai, more than double the price of her original ticket.
She’s one of millions of travelers swept up in war and other conflicts from Iran to Mexico this year, problems that are threatening the global tourism industry that’s worth an estimated $11.7 trillion to the world’s economy, according to industry group World Travel & Tourism Council. It’s showing that people who are far from falling missiles, drone attacks and other geopolitical flashpoints aren’t immune to ripple effects.
‘Aviation quagmire’
Stranded passengers wait with their luggage outside the Hazrat Shahjalal International Airport in Dhaka on March 3, 2026 after carriers cancelled flights amid the Middle East conflict.
Munir Uz Zaman | Afp | Getty Images
The U.S.-Israel attack on Iran set off massive aviation, travel, and safety crises.
More than a million people around the world were stranded because of airspace closures that have grounded over 20,000 flights since Saturday, according to aviation data firm Cirium. Some were also stuck on cruise ships. Inquiries for more expensive “cancel for any reason” travel insurance policies surged 18-fold this week, said Chrissy Valdez, senior director of operations for Squaremouth, an online insurance marketplace.
Since the Feb. 28 attacks on Iran, that country has launched retaliatory strikes on the United Arab Emirates — home to Dubai International Airport, the world’s busiest for international passenger traffic, according to Airports Council International — as well as Qatar, Jordan, Israel and Cyprus. The back-and-forth attacks have left airlines with little recourse to repatriate travelers.
Days after the attack, the U.S. State Department told citizens in a large part of the region to leave immediately, with few options at hand. The department said it is organizing charter flights for U.S. citizens who want to return from Saudi Arabia, Israel, UAE and Qatar.
“This has spiraled into an aviation quagmire,” said Henry Harteveldt, a former airline executive and founder of travel consulting firm Atmosphere Research Group.
Other sectors of the travel industry are also dealing with the war’s impact. Debris rained down near Accor‘s Fairmont The Palm Hotel in Dubai over the weekend. The company said four people were injured, but none were guests, visitors, or staff. Meanwhile, the iconic Burj Al Arab hotel had a fire earlier this week after it was hit by debris from an Iranian drone.
(L to R) The Malta-flagged cruise ships Aroya Manara and MSC Euribia are anchored at the port of Dubai on March 4, 2026.
Giuseppe Cacace | AFP | Getty Images
MSC Cruises’ more than 6,300-passenger MSC Euribia ship has been stranded in Dubai and the company is trying to get flights for affected guests, it said. “We are requesting priority for our guests from our partners,” the company said in a statement.
“In order to speed up the repatriation, we are working on other options such as chartering flights” from Dubai, Abu Dhabi, UAE, or Muscat, Oman, but the situation on board “remains calm,” the cruise company said.
Earlier this week, MSC said it would cancel its remaining sailings from Dubai for the winter. “We understand that this will be disappointing, but we are sure that guests impacted will understand this decision,” it said.
Putting aside the Covid-19 health crisis that ground most international travel to a halt, Harteveldt called this week “the most chaotic event we’ve seen frankly since 9/11 when the U.S. chose to close its airspace. We haven’t seen anything that has had such a long and geographically widespread impact on travel.”
Global conflicts
Flightradar24 still of flight traffic across the Middle East on March 4th, 2026.
Source: Flightradar24.com
The Iran war is the most severe military conflict this year, but it’s one of a series of obstacles that have threatened travel demand and profits for hotels, airlines and cruise companies, as well as local economies that depend heavily on travel, especially international tourists, who tend to spend more than local visitors.
Three days into 2026, the U.S. struck Venezuela and captured its president, Nicolás Maduro, and his wife, Cilia Flores. The attack prompted the U.S. to close airspace throughout the Caribbean, stranding travelers, many at pricey resorts and home rentals they had booked for the holidays.
Then in February, flights were grounded in parts of Mexico, including in the coastal resort city of Puerto Vallarta and in Guadalajara, after violence broke out following the Mexican army’s killing of a cartel leader.
Executives have already had to make costly changes: rerouting or cancelling sailings, issuing flexible booking and refund policies, grounding planes and changing flight plans altogether, or discounting hotel rooms.
The cost of these conflicts is still being tallied, including for fuel, one of the biggest expenses for cruise companies and airlines, along with labor, and is usually passed along to consumers, but signs are emerging on how customers will be affected.
First: Pricier tickets and stays are in the cards.
Higher airfare
United Airlines CEO Scott Kirby said on Thursday that jet-fuel prices, which have surged 60% since the U.S. and Israel’s first strikes on Iran last week, would hit first-quarter results, if not the second quarter as well. That will likely translate quickly to higher airfare, he added.
Despite the higher fuel, which accounted for 20% of United’s operating expenses last year, according to a securities filing, with few flights operating in the Middle East, bookings have jumped from regions like Australia for United flights because it offers different routes to the U.S., he said.
Speaking outside an event at Harvard University, Kirby said that demand overall has remained resilient since the conflict broke out.
Airlines around the world have been forced to take longer, more costly routes because of airspace closures.
Australian carrier Qantas, for example, told CNBC that its flight from Perth, Australia, to London will now take a route that requires it to refuel in Singapore, though that will also allow it to pick up another roughly 60 passengers.
Best year ever?
Passengers look at departure screens showing cancelled flights to Puerto Vallarta at Benito Juarez International Airport after authorities reinforced security following roadblocks and arson attacks carried out by organized crime in several states, after a military operation in which a government source said Mexican drug lord Nemesio Oseguera, known as “El Mencho,” was killed in Jalisco state, in Mexico City, Mexico, February 22, 2026.
Luis Cortes | Reuters
Travel executives started off 2026 as they often do: upbeat. Some airline executives, including those at the most profitable U.S. carriers, Delta Air Lines and United, forecast record earnings within reach this year.
The war and other incidents erupted as the travel industry has been leaning on premium options to woo wealthier customers, who make up a greater share of spending overall. Losing the base for more expensive trips could be extra disadvantageous to those companies and local economies.
In Mexico, for example, tourism makes up close to 9% of the economy and international tourist arrivals rose 13.6% last year to 98.2 million people, who spent close to $35 billion, according to the country’s Tourism Ministry.
Now, airlines are pulling back on traveling to Puerto Vallarta, at least from the United States in the near term. Delta cut routes from April 3 through the end of the month to the city, except for once-daily flights from Los Angeles and Atlanta, according to the Cranky Network Weekly newsletter, which covers the airline industry’s network changes. Alaska Airlines and Southwest Airlines also cut service in March.
“Perhaps people will forget about the PVR [Puerto Vallarta International Airport] concerns now that headlines will shift to the Middle East and bookings will rebound, but we will be watching capacity changes as leading indicators,” Brett Snyder and Courtney Miller, the newsletter’s authors, said in the March 1 edition.
Smoke billows amid a wave of violence, with torched vehicles and gunmen blocking highways in more than half a dozen states, following a military operation in which a government source said Mexican drug lord Nemesio Oseguera, known as “El Mencho,” was killed, in Puerto Vallarta, Jalisco, Mexico, February 22, 2026.
@morelifediares via Instagram | Reuters
The recent issues also come three months ahead of the FIFA World Cup, which is set to be hosted by cities in Canada, Mexico and the United States.
Some hotels in Mexico are starting to notice a change, too.
Victor Razo, manager at the Rivera del Rio hotel in Puerto Vallarta, told CNBC that bookings are down around 10% compared with last year.
“We’ve had some promotions given what had happened,” he said, adding it brought down rates between 10% and 20% ahead of the busy spring break and Holy Week period in the coming month.
He added that the hotel wasn’t near the problems, which included road blockades, and that bookings have since stabilized.
“It’s not like the beginning of the pandemic,” he said. “There is no comparison.”
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