India’s industrial sector is showing signs of a turnaround. A
recent report from Bank of Baroda (BoB) points to three key drivers for a pick-up in
industrial growth in the second half of FY26: GST rationalisation, the upcoming festival
demand surge, and an environment of easing inflation. For manufacturers, exporters, and
supply-chain businesses, this is an opportunity — but only if you’re ready to act.
Let’s break down what this means, why it matters, and how
businesses like yours should plan ahead.
What’s
Driving the Industrial Growth Revival?
1. GST Rationalisation
- The GST rate cuts and slab simplifications
(effective 22 September 2025) are reducing input and manufacture costs for many
sectors.
- Lower tax burdens on consumer goods and durables
increase demand, which in turn boosts manufacturing output.
- From raw materials to finished goods, businesses
that act early on compliance and pricing could gain a competitive edge.
2. Festival Demand Surge
- The period of Navratri, Diwali, and year-end sales
typically drives big consumption uptick.
- With improved affordability (thanks to lower GST
rates on essentials and durables), consumption is expected to be stronger in H2.
- Manufacturers and supply-chains should gear up for
higher volumes now rather than later.
3. Easing Inflation & Input Costs
- For many businesses, rising commodity and energy
costs have been a drag.
- As inflation pressures moderate and logistics costs
stabilise, margins may improve — allowing firms to scale production or invest in
capacity
- Combined with GST input benefits, the outlook
becomes more favourable
Why This
Matters for Businesses
- If you’re a manufacturer, you
should anticipate higher orders, stock your pipelines, and review your pricing
strategies.
- If you’re in exports, improved
global demand plus domestic manufacturing support could create new opportunities.
- If you’re in the supply-chain or
services sector (logistics, warehousing, components), you’ll likely see
uplift from the demand in manufacturing.
- But it’s not automatic: you’ll need to align operations, tax compliance, cost management, and
scale readiness.
Immediate
Action Steps for H2 FY26
| What You Should Do Now |
Why It’s Important |
| Review & optimise GST input
credits
|
Lower costs, better margins
|
| Update pricing strategies in
light of demand |
Avoid being under-priced or
left behind |
| Review supply-chain
bottlenecks |
Ensure you can scale if demand
picks up |
| Ensure you can scale if
demand picks up |
The new regime will focus on
data & audits |
| Plan for cash-flow spikes or
dips
|
Higher volumes may demand more
working capital |
How Trakintax
Helps You Get Ready
At Trakintax, we specialise in
helping businesses navigate these tax and compliance changes seamlessly:
-
GST Audit & Credit Review: We analyse your input tax
credits, reconcile for mismatches, and optimise your claims so you execute
cost-effectively.
-
Pricing & Structure Advisory:With demand expected to
rise, we help you align your pricing, review GST slabs on your products, and ensure
you’re benefiting from the rationalisation.
-
Multi-State Compliance:If your operations span multiple
states, we assist with registrations, return strategy, and inter-state supply compliance
-
Cash-Flow & Tax Planning: We help you model scenarios for
increased volumes, propose tax-efficient structures and support your growth plans..
Whether you are manufacturing, supplying, exporting or
servicing, Trakintax ensures you’re compliant, efficient, and ready to capitalise on the H2
FY26 momentum.
Potential
Risks to Watch
- If you don’t update your systems, you may miss out on input
credits or face penalties under the tightened GST scrutiny.
- Aggressive expansion without cash-flow backup can strain working
capital.
- Sudden demand does not always translate into profits—look at
product mix, margin pressures, and supply-chain cost.
- Global headwinds or tariff issues could still impact demand, even
domestically.
Final
Thoughts
The industrial growth rebound slated for H2 FY26 is a
meaningful signal for India’s manufacturing and allied sectors. With GST rationalisation,
festival-driven demand and easing inflation, the environment is favourable. But for growth
to translate into business advantage, you’ll need to plan ahead,
optimise tax and compliance and build operational readiness.
With Trakintax as your partner, you’re not just
reacting—you’re getting ahead. Let’s connect and prepare your business to leverage the
upcoming growth phase.
Contact us today for a free consultation.
Mobile: 9358072247
Gmail: trakintax@gmail.com
