Consumer Goods Firms Prepare for Growth as Budget 2025 Tax Relief Boosts Demand
Kolkata | New Delhi: Consumer goods manufacturers, including those in electronics, home appliances, and two-wheelers, are gearing up to ramp up production and optimise capacity for entry-level products. The move comes as companies anticipate a revival in demand for mass-market goods following the income tax benefits announced in Budget 2025.
Over the past three to four years, demand for budget-friendly products has remained weak due to rising inflation, prompting many companies to scale back production. Some even discontinued entry-level offerings, shifting focus to premium products, which saw increased sales after the pandemic.
‘The additional disposable income from tax relief is expected to boost sales of mass appliances, smartphones priced up to ₹12,000, and 32-inch televisions,‘ said Atul Lall, Managing Director of Dixon Technologies, a leading contract manufacturer of electronics.
He added that since most companies now follow a hybrid production model, contract manufacturers could see a surge in orders, leading to better capacity utilization.
Tax Relief in Budget 2025 Expected to Boost Entry-Level Consumer Goods Sales
Kolkata | New Delhi: The recent income tax relief announced in Budget 2025 is expected to drive demand for entry- and mid-segment consumer goods, with companies preparing to scale up production. Kamal Nandi, Business Head at Godrej Appliances, noted that individuals earning between ₹10-12 lakh per annum typically purchase these products. ‘Tax savings will likely boost sales in this segment, prompting companies to expand production,‘ he said.
The government has increased the tax-free income threshold from ₹7 lakh to ₹12 lakh per year, benefiting an estimated 10 million taxpayers. This measure will allow individuals to save between ₹20,000 and ₹80,000 annually while also reducing tax liabilities for higher-income groups.
Despite an overall recovery in the domestic two-wheeler market, sales of entry-level motorcycles (75cc-110cc) remained sluggish. Between April and December 2024, two-wheeler sales rose by 11.6%, but growth in the entry-level motorcycle category was limited to 3.5%, reflecting continued pressure on discretionary spending. Similarly, volume sales of electronic goods have remained flat this fiscal year due to weak demand for budget-friendly products.
Budget 2025 Tax Relief Expected to Boost Consumer Sentiment, Entry-Level Demand
New Delhi: The government’s focus on income tax rationalisation and middle-class relief in Budget 2025 is expected to drive consumer confidence and stimulate demand for entry-level products. Yogesh Mathur, Director of Sales & Marketing at Honda Motorcycle & Scooter India, stated that higher disposable income could lead to increased sales in this segment.
‘With more savings in the hands of consumers, we anticipate a positive shift in demand for entry-level products,‘ he said. Mathur also highlighted that initiatives to strengthen domestic manufacturing would further contribute to industry growth.
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