Garba Goodies, Diwali Dhamaka: GST cuts to spark ad boom, 8-10% surge in brand spends

gst cut ad rush

Advertisers are seeing GST (Goods and Services Tax) 2.0 as the perfect ad jingle, that is short, catchy, and guaranteed to make wallets sing louder this festive season with advertising spends by brands estimated to increase by around 10 percent.

Ad industry veteran and founder of The Bhasin Consulting Group, Ashish Bhasin expects 8-10 percent growth in ad spends between September to December.

He pointed out that the GST cuts will be implemented from September 22 which is bang in the middle of the festive season. "Almost 40-45 percent of the entire year's advertising happens at this time. People also get their Diwali bonuses and all this will give companies the confidence to advertise because they will see that there is an uptick in demand likely to happen and they would want to capitalize on it.

He added, "This (GST cut) is not an isolated benefit. It is coming on the back of the income tax reduction which is huge, the effect of which should now start trickling in. It's also coming on the back of another year of a reasonably good monsoon at least so far. And the RBI (Reserve Bank of India) has already taken a lot of measures to introduce a lot of liquidity into the system through rate cuts."

India recorded a total advertising expenditure (AdEx) of around Rs 1.08 lakh crore in 2024, growing 9 percent versus the previous year, according to estimates by Madison Advertising, a top media agency. Last year the growth rate in ad spends slowed and for the first time Indian Adex trailed global Adex growth, which stood at 11 percent. On the other hand, the agency estimated Adex to grow 11 percent versus 8 percent for global Adex on the back of a good budget, in 2025.

The ad industry now expects around a 20 percent growth with ad spends reaching 1.3 lakh crore due to the impact of the GST cuts, among others.

"Roughly about Rs 1,200–Rs 2,500 crore of incremental spend is expected driven by categories with immediate price elasticity," said Sumon K Chakrabarti, Co Founder and CEO- Buffalo Soldiers. He added that the GST cuts put real money back in the basket right when India shops from Navratri to Diwali, a classic trigger for promo bursts, launch pushes and retail media blitzes. "Expect sharper deal-led communication, and more creator-commerce because of these cuts."

Isha Jaiswal, CA, Entrepreneur and a content creator pointed out that the GST on advertising services itself remains unchanged at 18 percent, so the benefit for AdEx comes from the demand side rather than any direct tax reduction on ad services.

Festive fireworks

The timing, just ahead of the festive season, means we could see a sharper-than-usual spike in AdEx, noted Prashant Puri, Co-Founder & CEO, AdLift (acquired by Liqvd Asia). The GST simplification with two tax slabs now also helps SMEs (Small and Medium-sized Enterprises) and regional brands, who may now find it easier to formalize operations and invest in marketing."

But the front-runners will continue to be FMCG and auto especially with the direct benefit of GST cuts, said Yasin Hamidani, Director, Media Care Brand Solutions. Spends by FMCG brands are likely to go up by 12–15 percent driven by snacks, beverages, personal care while automobile brands to increase by 10–12 percent led by two-wheelers and entry-level cars.

He expects overall festive ad spends to see a sharper surge of 15–18 percent higher than last year.

"Consumers are already primed to spend during Diwali, Navratri, and the marriage season, and reduced GST will only fuel demand. Marketers won’t miss the chance to ride this sentiment wave. Expect big-ticket festive campaigns, flash sales, and influencer-driven storytelling to dominate," he added.

Ambika Sharma, Founder and Chief Strategist, Pulp Strategy expects sharper bursts around Navratri-Diwali with new-car launches, and white-goods promotions. "E-commerce/Quick Commerce are estimated to increase sends by 10–15 percent to capture uplifted demand. Retail/Jewellery to increase spends by an estimated 8–12 percent with festival collections and offer-led communication in digital and outdoor."

Hamidani expects insurance and BFSI (Banking, Financial Services, and Insurance) categories to increase spends by 15–18 percent with regional push and digital storytelling.

The 56th GST Council, chaired by finance minister Nirmala Sitharaman, slashed tax rates on individual health and life insurance premiums, cutting the tax from 18 percent to zero.

While durables and auto will use price relief for trade offers and financing pushes, broadcasters and live event sponsors will watch the 40 percent slab closely, said Russhabh R Thakkar, Founder and CEO, Frodoh.

"The new 40 percent luxury slab for specific events makes live event attendance costlier and creates downside pressure on event related sponsorship and experiential spends. Pockets like live events and real money gaming face headwinds but FMCG and retail will lift frequency and distribution led promos. BFSI will follow the post festive period with acquisition campaigns tied to purchases," he added.

Spotlight on digital, influencers

Digital and influencers are likely to benefit the most, according to marketers.

Digital and influencer marketing will lead the surge, with digital spends expected to jump 15–18 percent, TV holding steady around mass festive events, and influencers seeing 2–3 times spikes around launches and festive campaigns, said Nahush Gulawani, Co-founder at WIt & Chai Group.

Sakchi Jain, CA and Financial Educator who also creates social media content also expects vibrant festive campaigns across malls, digital platforms and influencer channels. "E-commerce players like Amazon and Flipkart are also gearing up with creator collaborations and sharp pricing to attract festive shoppers."

The two platforms have announced their festive sale dates starting from September 23, a day after revised GST rates will become applicable.

According to her, a lot of brands will collaborate with influencers to communicate the new lower prices in a more relatable and trustworthy way. "Digital and influencer-led campaigns are going to pick up faster and earlier than usual. With more consumers in Tier 2 and Tier 3 cities having higher spending power now, brands are using local influencers and regional content to connect better. Brands want to turn the positive consumer mood into action and they see creators as a strong way to drive both awareness and trust during this key season."

Influencers are emerging as a separate medium now, said Hamidani, who expects at least 20 percent higher allocations for influencer marketing, especially from FMCG, e-commerce, and lifestyle brands.

"Television will still hold strong, growing 7–9 percent, as it remains the most impactful during festive programming and cricket season. Print will benefit moderately in regional markets, while OOH (Out Of Home) and cinema will see revival in urban hubs," he added.

Cautiously optimistic

Bhasin is hopeful of seeing a full year impact in 2026 unlike just the festive season this year.

While it is a positive step, the impact of the GST cuts will take time to trickle down. "There could always be a black swan event around these (Trump) tariffs but if the tariff issue gets resolved then that will be another booster, he said.

He remains cautiously optimistic for next year. "There are too many imponderables and too many uncertainties at this stage to be able to forecast next year accurately. But overall, the picture seems buoyant to me going forward. We have reasons to be positive. But I would say cautious optimism at this point in time for next year because of the uncertainties like the Ukraine-Russia war which is not yet resolved, the Middle East situation still which could deteriorate. And the tariff issue is very unpredictable."