The report notes that consumers may push forward purchases until the tax cuts are implemented
While the proposed rationalisation of the Goods and Services Tax (GST) slabs would further aid consumption of household goods, Icra has warned that this may partly delay consumption of discretionary items in the run-up to the festive season.
The report noted that consumers may push forward purchases until the tax cuts are implemented. Nevertheless, this would shore up consumer sentiments ahead of the festive season. Icra said that the proposed rationalisation would boost demand for daily essentials, packaged food items, apparel, footwear, consumer durables like air conditioners, televisions and refrigerators.
Earlier, highlighting the critical importance of the upcoming festive season for millions of small sellers across India, the India SME Forum noted that any sudden regulatory changes could severely impact their business sustainability. Noting that an uncertainty around goods and services tax (GST) slab revisions could dampen consumer spending, the forum urged regulatory bodies to consider the timing of any new compliance requirements, as they could severely impact seller livelihoods during their most critical business period.
The forum emphasised how digital marketplaces have democratised access to nationwide markets for small sellers, enabling them to compete effectively with larger retailers. This digital transformation has been particularly vital for small town businesses, who now reach customers across India, the statement noted
Led by a sizeable improvement in a small set of indicators, including non-oil exports, GST e-way bill generation and auto output, the year-on-year (YoY) growth in economic activity, as measured by Icra business activity monitor, rose to a three-month high of 7.1 per cent in July 2025 from 6.2 per cent in June 2025. However, indicators pertaining to the mining and electricity sectors reported sustained weakness.
On the employment front, Icra emphasised that rural India drove job gains in July 2025 as compared to June 2025, although this was likely seasonal in nature, led by a pick-up in kharif sowing activity.
