Motorcycle prices in India are set to drop by ₹5,000 to ₹15,000, according to Bajaj Auto, after the government announced a significant GST reduction on two-wheelers. The GST rate for bikes up to 350cc has been lowered from 28% to 18%, effective September 22, 2025. This move is expected to bring immediate price relief for buyers and provide a strong push to the struggling two-wheeler market.
Rakesh Sharma, Executive Director of Bajaj Auto, said the cut could boost sales volumes while also encouraging customers to “up-trade” to higher-end models. He added that the industry, which remains about 10% below its 2018–19 sales peak, now has a chance to fully recover.
This GST reform is part of the government’s broader tax rationalization. The new system simplifies slabs into two main categories—5% and 18%, with exemptions for essential services. For the auto sector, the change is a big win for mass-market motorcycles and scooters, while premium bikes above 350cc will face a 40% sin tax, keeping them out of the affordability bracket.
The impact of this price cut could be significant during the upcoming festive season, when demand for two-wheelers usually spikes. Analysts believe that affordable motorcycles, especially commuter bikes, will see the highest surge in demand, while urban buyers may use the reduced tax burden to shift towards sportier or mid-segment models.
Why It Matters
- Consumer Relief: Buyers of budget motorcycles and scooters could save thousands, making two-wheeler ownership more accessible for middle-class households.
- Industry Recovery: The sector has struggled post-pandemic, but this GST cut may revive demand and restore pre-2019 sales momentum.
- Shift in Buyer Behavior: More customers may opt for higher-end bikes within the 350cc category, boosting margins for companies like Bajaj Auto.
- Balanced Tax Policy: By taxing luxury motorcycles heavily while easing rates on commuter bikes, the government is supporting mass mobility while maintaining revenue from premium segments.
