Prime Minister Narendra Modi is set to embark on a two-day visit to Gujarat, where he will inaugurate and dedicate development projects worth over ₹5,400.00 crore across various sectors. The visit, scheduled for August 25-26, will showcase significant advancements in urban infrastructure, power, transport, and green energy initiatives.

Boost to Electric Vehicle Manufacturing

A key highlight of the Prime Minister's visit will be the inauguration of localized production of hybrid battery electrodes at the TDS Lithium-Ion Battery plant. This facility, a joint venture between Toshiba, Denso, and Suzuki, marks a significant step towards self-reliance in the electric vehicle (EV) sector. The plant is set to manufacture over 80.00% of the battery value chain domestically, bolstering India's position in the global EV market.

In a momentous event, PM Modi will flag off Suzuki's first global battery electric vehicle, the e VITARA. Manufactured in India, this electric SUV is slated for export to more than 100 countries, including major markets in Europe and Japan. This launch underscores India's growing capabilities in EV production and its potential as a global export hub for electric vehicles.

Railway Infrastructure Enhancement

The visit will also see the dedication of railway projects worth over ₹1,400.00 crore. These include:

• Doubling of the Mahesana-Palanpur railway line
• Gauge conversion projects

These initiatives are expected to significantly improve rail connectivity and efficiency in the region.

Power Distribution Upgrades

Under the Revamped Distribution Sector Scheme, power distribution projects worth over ₹1,000.00 crore will be unveiled in key cities:

• Ahmedabad
• Mehsana
• Gandhinagar

These projects aim to enhance the reliability and quality of power supply in these urban centers.

Urban Development and Data Infrastructure

Additional projects to be launched during the Prime Minister's visit include:

• Road widening initiatives
• Urban infrastructure development projects
• Foundation laying for a new data storage centre in Gandhinagar

These projects are part of the government's efforts to improve urban living conditions and boost digital infrastructure in the state.

The diverse range of projects being inaugurated reflects the government's focus on multi-sectoral development, combining traditional infrastructure upgrades with cutting-edge technology initiatives. This visit by Prime Minister Modi is expected to give a significant boost to Gujarat's development trajectory, particularly in the realms of sustainable transportation and urban development.

Maruti Suzuki India , the country's largest carmaker, has set ambitious export targets and shared views on trade policy reforms, while its shares surged by 8% in a single day, marking the biggest gain in five years.

Export Ambitions and Trade Policy Views

Maruti Suzuki's Co-Chairman outlined the company's export ambitions, targeting 400,000 car exports in FY2025-26. The company expects new trade agreements to create market opportunities. The Co-Chairman believes that opening trade borders will enhance efficiency, market growth, and introduce competition, leading to reduced prices and greater affordability for consumers. He anticipates free trade agreements to benefit Indian exports rather than just imports.

Potential GST Rate Cut

The recent stock rally was fueled by hopes of a potential rationalization in Goods and Services Tax (GST) rates for smaller cars. Sources indicate that the government is considering reducing GST rates on cars with engine capacity below 1,200 cc from the current 28% to 18%. Similar proposals are also being considered for hybrid passenger vehicles.

The Co-Chairman stated that changes to consumption tax will boost the competitiveness of Indian products, calling India's GST tax rationalization a 'major improvement' for the economy.

Market Impact and Analyst Views

The news of potential GST cuts has sparked optimism among investors and analysts. Morgan Stanley noted that the automobile sector contributes about 14.00% to overall GST collection and expects Maruti Suzuki and Mahindra & Mahindra (M&M) to be the biggest beneficiaries of any rate reduction.

Nomura, another prominent financial services group, believes that a 10.00% reduction in GST could potentially increase automobile demand by 15-20%, further boosting the sector's prospects.

Stock Performance

Following the news, Maruti Suzuki's shares traded 7.30% higher at ₹13,884.00. The stock has shown strong performance this year, with a year-to-date increase of 24.00%.

Analyst Recommendations

The positive sentiment is reflected in analyst recommendations as well:

Out of 46 analysts covering Maruti Suzuki, an overwhelming majority of 36 have issued buy ratings, indicating strong confidence in the company's future prospects.

The potential GST rate cut, combined with Maruti Suzuki's ambitious export targets and positive outlook on trade liberalization, could provide a significant boost to the company and the broader automotive sector. However, investors should note that these are still expectations, and the final decisions rest with the government and the company's performance. As always, market participants are advised to keep a close watch on official announcements and consider their investment decisions carefully.