HOW THE GST CUT COULD RESHAPE INDIA'S MANUFACTURING FUTURE

A lower tax on clean energy gear isn't just a win for consumers-it opens doors for manufacturing, jobs and sustainable growth.

- By Team ET Now Machinist

The move to cut GST on renewable energy equipment is being hailed as a game changer not just for clean energy, but for India’s manufacturing sector too. From September 2025, the tax rate on modules and related components has been slashed from 12 % down to 5%.

Let's see why this matters beyond solar panels on rooftops.

LOWER COSTS, STRONGER DEMAND

For homeowners, the reduction translates into direct savings, roughly Rs. 9,000 to Rs. 10,500 off a 3 kW rooftop solar system.

Such lowered entry costs will likely spike demand. More households, more small businesses, more solar pumps in rural India, all of this expands the market for renewable energy goods.

A BOOST TO “MAKE IN INDIA”

Here's where things get exciting for manufacturing. The GST cut is expected to reduce component and module costs by 3-4 %, giving Indian producers a sharper edge compared to imports.