Blue Star Ltd. now expects its air-conditioner (AC) sales to surpass earlier projections for the current financial year, driven by anticipated GST reforms, according to Managing Director B. Thiagarajan. Initially estimating a 10–15% growth in room AC sales volumes for the year ending March 31, the company now forecasts growth of up to 20% in India’s price-sensitive market. Thiagarajan told Reuters that the potential reduction in GST—from the current peak rate of 28% to possibly 18%—would be a major boost for both dealers and manufacturers, especially after a cooler summer hurt demand.
Calling the proposed GST cut “extraordinary,” he said it could drive significant demand in a sluggish year. Prime Minister Narendra Modi announced major GST reforms in his August 15 Independence Day speech, with the GST Council—led by Finance Minister Nirmala Sitharaman—set to discuss the changes in early September.
Despite this optimism, concerns remain. Indian companies have faced the steepest earnings downgrades in Asia, partly due to looming US tariffs. While GST cuts could raise India’s GDP by 0.35–0.45 percentage points by FY27, a 50% US tariff could drag it down by 1 percentage point. Short-term pain is expected as consumers delay purchases until the reforms take effect.