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The GST rationalisation introduced on September 22 — touted as a major simplification move by the Modi government — may have energised sales and consumption across several categories, but its impact on India’s advertising industry has been minimal so far.
Apart from a burst of “GST rate cut” campaigns rolled out by multiple brands to thank the government and signal optimism, the anticipated AdEx revival has not materialised, industry leaders told e4m.
Television and digital media, which together contribute nearly 80% of India’s advertising market, remained flat in September and October compared to August, according to TAM data exclusively accessed by e4m.
Read e4m deep dive on GST overhaul and FMCG performances
Print media fared better with a 35% spike during the same period, while radio grew 16-25%, driven largely by festive demand rather than structural changes.
The new GST framework collapsed earlier slabs into two primary rates — 5% and 18% — leading to price cuts for many brands across FMCG, consumer electronics, small cars, and two-wheelers. But the advertising market hasn’t yet felt a meaningful stimulus from this shift.
Fundamentals Not Shifted Enough Yet
The current ad market slump stands in contrast to listed FMCG majors such as HUL (10.6%), Dabur (3.6%), Godrej Consumer (19.7%) and Emami (13%), which reported higher year-on-year ad spends in Q2 ending September. But experts caution that this uptick reflects the usual pre-festive momentum and should not be mistaken for an early impact of the GST reform. Some like Colgate Palmolive (-7%) and Patanjali even slashed their ad spends.
Read e4m report on if GST rationalisation is ad market stimulus
Overall auto retail sales also grew by a robust 40.5% YoY, as both passenger vehicles and two-wheelers achieved lifetime highs, as per data released by Federation of Automobile Dealers Association (FADA).
Industry observers note that while market sentiments improved after the GST rate cut and due to the festive season, the underlying demand fundamentals are still not strong enough to justify higher marketing outlays.
“The GST reform was a good signal and boosted confidence, but erratic monsoons disrupted rural demand. Most advertisers are yet to feel tangible benefits as its implementation is still settling,” say experts.
Read more on FMCG grappling with uneven GST slabs
Besides, FMCG companies, which are major advertisers, could not pass on GST benefits immediately due to packaging, inventory, and distribution cycles. No brand wants to trigger pricing confusion mid-cycle,” explained a senior media audit planner. “That’s why FMCG ad spends didn’t spike much post-GST.”
Auto and consumer durables — categories that benefited immediately from price reductions — saw strong festive sales without much marketing pushes. “Products started moving without heavy promotions. Yet, leading brands shell out extra ad dollars to cash in on the price cut,” said a strategy head at a leading agency.
RMG Ban Neutralises Gains?
Even as auto and FMCG brands stepped up spending to capitalise on the moment, the government’s ban on real-money gaming (RMG) effectively neutralised those gains.
The ban has wiped out nearly 86 per cent of the gaming sector’s revenue and created an estimated ₹9,000–10,000 crore AdEx gap. RMG brands were among the most aggressive spenders across digital, cricket, OTT, and influencer marketing, with many partnering top global agencies for creative and media duties.
Their absence has significantly weakened the industry’s growth curve — especially in digital, which relied heavily on gaming-led spends.
Lukewarm H2 Expected
The second half of the fiscal traditionally accounts for 55–60% of annual AdEx, powered by festivals, winter retail, and cricket. But this year feels subdued.“Even with GST relief, clients are holding back until they get a clearer reading of consumer sentiment,” said a top agency CEO.
Most experts anticipate only a modest rise in H2, keeping the overall AdEx growth in the low single digits. A more meaningful revival is expected only if the GST’s cascading benefits translate into stronger consumption in Q4. For now, the reform has improved confidence but has not yet triggered the broad-based acceleration that agencies were hoping for.