GST rate cuts to drive 12% rise in AdEx; FMCG, Auto sectors to lead spending surge
Television is expected to rise 7–9% as brands invest in festive programming, cricket, and regional entertainment. Digital will continue to outpace other mediums with 15–18% growth
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The Goods and Services Tax (GST) Council’s decision to introduce a simplified two-tier structure of 5% and 18%, effective September 22, is set to transform not only consumer markets but also the advertising expenditure (AdEx) landscape in India. Industry leaders and media experts believe the move will unlock a new wave of consumption-led advertising growth, with television, digital, and insurance segments emerging as major beneficiaries.
Amin Lakhani, President of Client Solutions at WPP Media South Asia, described the reform as a watershed moment for both consumers and advertisers. “The government's bold move to simplify the GST framework is a game-changer for the Indian consumer market. By making essential goods and consumer durables more affordable, this reform injects significant purchasing power directly into the hands of the Indian consumer. For us in the media and advertising industry, this is a clear signal of renewed market optimism. It creates a fertile ground for our clients, particularly those in the FMCG and consumer electronics sectors, to launch aggressive, consumer-centric campaigns. We anticipate a surge in advertising spends as brands look to capitalize on this consumption-led growth story,” he said.
The optimism was echoed by Yasin Hamidani, Director of Media Care Brand Solutions, who projected immediate gains for AdEx. “With GST reductions in FMCG and automobiles, consumer sentiment is set to strengthen. Whenever spending power expands, advertising budgets quickly follow. We could see AdEx grow by 10–12% in the near term, with brands leveraging this optimism through high-decibel campaigns, especially around festive peaks,” he noted.
Hamidani added that FMCG would lead the charge due to its volume-driven nature, followed by automobiles, while retail and e-commerce would also ride on the consumption boost. On the insurance segment, he stressed, “Insurance is at an inflection point—rising disposable incomes and aspirations are expanding the category’s relevance. I expect insurance AdEx to grow 15–18% year-on-year, with sharper investments in digital storytelling, influencer partnerships, and regional outreach to build trust and capture Tier 2–3 audiences.”
According to Hamidani, the media mix will diversify further with GST-led consumption growth. Television is expected to rise 7–9% as brands invest in festive programming, cricket, and regional entertainment. Digital will continue to outpace other mediums with 15–18% growth, fueled by performance marketing, influencer tie-ups, and sharper targeting in smaller cities. Print may see a 5–6% lift, especially in regional editions for auto and insurance, while radio and out-of-home advertising could expand by 6–8%. Cinema advertising, buoyed by multiplex footfalls, is forecast to achieve double-digit growth.
Somdutta Singh, Founder and CEO of Assiduus Global, highlighted the direct correlation between GST cuts and AdEx expansion. “A reduction in GST slabs for FMCG and Automobile sectors will cause a direct boost to consumption, leading to significant amplification in advertising expenditure,” she said. Singh estimated that FMCG ad spends could rise by 8–10% in the immediate quarter, while automobile advertising could grow by 12–15%, particularly during the festive season and new product launches. Insurance, she added, could witness 18–20% AdEx growth over the next year, with digital channels capturing nearly half the spend. E-commerce, retail, luxury, and consumer durables were also identified as key sectors poised for advertising acceleration.
Fresh estimates from MediaPro Research underline the scale of the anticipated boom. At the baseline, TV AdEx for CY 2025 was pegged at ₹36,520 crore. With GST cuts factored in, an incremental uplift of 2–3% is expected between September and December 2025, adding ₹730–₹1,095 crore and pushing revised TV AdEx projections to ₹37,250–₹37,615 crore. For 2026, a full-year structural uplift of 5–8% is projected compared to pre-GST scenarios, though experts caution that 15–30% of incremental video budgets may flow into connected TV and digital.
Sectoral dynamics suggest FMCG will be the first to scale up advertising, with brands leveraging price cuts and grammage offers to push volumes, resulting in a 3–5% rise in TV AdEx in late 2025 and a 6–10% boost on a 2026 run-rate basis. Automobiles, especially in the entry mass segment, could see a 2–4% increase in late 2025 and 8–12% growth in 2026.
Consumer durables, led by televisions and air conditioners, are expected to rebound with festival-driven upgrades, contributing a 3–5% rise in late 2025 and an 8–12% increase next year. Insurance is expected to deliver the largest surge, with the 0% GST on premiums translating into a 15–20% increase in TV AdEx during the last quarter of 2025 and a 25–35% expansion in 2026. Building materials, paints, e-commerce, and retail will also see meaningful uplifts, supported by housing demand and deeper discounting.
“GST in 2025 should be treated as an unplanned tailwind,” Vishal Khanna, Founder of MediaPro Research noted in its outlook. It advised advertisers to focus on market share rather than just gross rating points, with a 2–3% TV AdEx bump in the fourth quarter of 2025 and a 5–8% uplift in 2026 driven by FMCG, automobile, durables, and insurance. However, it flagged challenges such as rising ad rates in top genres, supply chain bottlenecks for automobiles and durables, and the risk of cannibalization from connected TV. Advertisers were urged to adopt integrated TV and CTV strategies to maximize returns.
The Council’s decisions introduced sweeping changes across multiple sectors. Ultra-high temperature (UHT) milk, paneer (chena), and all varieties of Indian bread have been moved from the 5% slab to nil GST. Household essentials such as hair oil, soaps, shampoos, toothbrushes, bicycles, and tableware now fall under the 5% category, as do popular food items like namkeen, pasta, instant noodles, coffee, cornflakes, butter, and ghee. The 5% slab has also been extended to handicrafts, marble and granite blocks, 12 specified biopesticides, natural menthol, spectacles, diagnostic kits, and renewable energy devices, including solar heaters and windmills.
Heavy industries and transport have also received relief. The GST on air conditioners, all television sets, dishwashers, cement, and small cars has been reduced from 28% to 18%. Motorcycles under 350 cc, buses, trucks, three-wheelers, and ambulances also move to the 18% bracket, while auto parts and tractors now fall under the same rate.
In healthcare, a significant reform was announced: 33 life-saving drugs have been exempted from GST entirely, down from the earlier 12% slab. Additionally, all individual life insurance and health insurance policies, including floater plans and senior citizen policies, have been exempted from GST to make insurance more affordable for households.
Agriculture and allied industries also benefit from the rationalisation. GST on soil harvesting machines, fodder machines, and composting equipment has been reduced to 5% from 12%, while rates on sulphuric acid and ammonium—critical inputs in fertiliser manufacturing—have also been slashed to correct the inverted duty structure in the sector.
