Tax Cuts Ignite Hope of Festival Sales Surge for India Carmakers

Sales of cars and SUVs are expected to pick up momentum after India announced the steepest tax cuts in nearly a decade to boost domestic demand as the economy braces for punishing US tariffs.

The Narendra Modi government slashed levies on everything from small cars and motorcycles to premium SUVs, making these vehicles more affordable for millions ahead of the India’s month-and-a-half-long festival season that drives about a quarter of annual auto sales. Lower taxes will spur price cuts potentially accelerating sales growth.

“This festive season could be the best ever,” said Santosh Iyer, chief executive of Mercedes-Benz India ...