India has proposed a significant reform of its Goods and Services Tax (GST) regime, aiming to lower the GST rate on small cars from 28% to 18% and reduce levies on premium cars to 40%, according to government sources. This move is part of a broader plan under Prime Minister Narendra Modi's administration to boost consumption demand and stimulate economic activity, particularly in the automotive sector. The proposed GST cuts have already triggered a rally in Indian auto shares, reaching a 10-month high, and are expected to reduce vehicle prices by approximately 7%, potentially reviving auto demand during the upcoming festive season. Additionally, the Group of Ministers (GoM) has supported proposals to scrap the 12% and 28% GST slabs, recommending the adoption of only two GST rates. The GoM has also backed GST exemption proposals for health and life insurance premiums, which may eliminate the input tax credit (ITC) benefit for insurance companies. These reforms are anticipated to lead to challenging negotiations with Indian states as the government seeks to implement these sweeping tax changes. The tax adjustments are also seen as part of a broader effort to enhance affordability and access in sectors such as healthcare and insurance, aligning with India's economic and self-reliance goals.