GST Reforms Spur Consumption Recovery While Imports Pressure Manufacturing Margins

Recent GST adjustments have boosted consumer spending, lifting near-term growth sentiment across retail and FMCG sectors. Analysts say smoother credit flow and streamlined compliance have improved business efficiency and reduced working capital strain. However, import costs remain elevated, posing challenges for domestic manufacturers reliant on global raw materials. Economists cautioned that India must sustain supply-chain resilience and incentivize local production to offset widening trade gaps. The reforms are expected to contribute positively to Q3 demand cycles despite lingering cost pressures across export-driven industries.