Maruti Suzuki India (MSIL) Chairman RC Bhargava called on Indians to remain firm and “not give in to any kind of bullying” after US President Donald Trump raised tariffs on Indian imports to 50 per cent this month. He stressed that the situation demanded collective national resolve to protect dignity and stand behind the government.
Speaking at the company’s annual general meeting, Bhargava said the use of tariffs as a diplomatic weapon was an unprecedented challenge. “President Trump has in many ways compelled nations to rethink their traditional policies and relationships. Our duty as Indians is to support the government, maintain our self-respect, and face this pressure unitedly,” he remarked.
At the domestic level, Bhargava pressed for tax relief to counter the economic strain from Washington’s move. He urged the GST Council, which meets on September 3 and 4, to reduce the levy on small cars from 28 per cent to 18 per cent—a change he said could revive demand, especially among lower-end buyers. “My hope is that the Prime Minister’s Independence Day proposal will translate into a lower GST on small cars. This would help the car industry recover, spur industrial activity, and create more jobs,” he noted.
MSIL’s expansion plans, he added, would also depend on the GST Council’s decision and its impact on domestic demand. While small car sales have been shrinking for years, the overall auto market has so far been supported by SUV growth—momentum that is now faltering, with passenger vehicle sales slipping 1.6 per cent in the first quarter of 2025-26.
Bhargava also sought tax parity for electric and hybrid vehicles, pointing out that while EVs attract just 5 per cent GST in India, hybrids face the maximum 28 per cent slab. “Globally, both technologies are treated similarly. India too must encourage all cleaner technologies—whether EVs or hybrids—that reduce oil use, cut pollution, and help us move towards net zero,” he said.
He recalled that the introduction of BS-6 norms in 2018-19 had made small cars more expensive, widening the affordability gap for two-wheeler users who aspired to upgrade to safer four-wheelers. As a solution, he cited Japan’s example of ultra-compact “Kei cars” from the 1950s, which were taxed lightly and offered scooter owners a cheaper upgrade path.
On the global supply chain front, he flagged risks linked to restrictions on rare earth magnets, calling them a “warning signal.” However, he expressed confidence that with government intervention and new trade pacts—such as the recently concluded agreement with the United Kingdom—India could navigate these challenges.
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