Nomura: GST Restructuring to Accelerate Growth in Defence, Renewable Energy, and Solar Industries – EQ
In Short : Nomura expects India’s recent GST restructuring to significantly benefit defence, renewable energy, and solar sectors. The rejig is likely to ease tax credit challenges, reduce project costs, and boost investor confidence. By addressing financial bottlenecks, the reform could accelerate clean energy growth and strengthen strategic industries, aligning with India’s economic resilience and long-term sustainability objectives.
In Detail : Nomura has highlighted that India’s recent restructuring of the Goods and Services Tax (GST) will bring notable benefits to the defence, renewable energy, and solar sectors. The move is expected to simplify taxation processes while addressing long-standing concerns around input tax credits. This adjustment could have a far-reaching impact on both strategic and sustainable industries.
For the renewable energy sector, the GST rejig is expected to reduce the financial burden on project developers. By lowering tax-related hurdles, solar and wind projects may become more cost-competitive, enabling faster deployment and wider adoption. This could directly support India’s ambitious renewable energy targets.
In the solar industry specifically, high upfront costs have often posed a barrier. The revised GST structure is anticipated to streamline costs across the value chain, from equipment procurement to project execution. Lower expenses could encourage greater participation from private players and investors.
The defence sector, another key beneficiary, will see improved financial clarity under the new GST system. By easing the complexities of tax credits, the reform could enhance procurement efficiency, enabling smoother transactions and better resource allocation for strategic manufacturing initiatives.
Investor sentiment is also likely to receive a boost from the reforms. By eliminating tax uncertainties and reducing compliance hurdles, the changes create a more stable environment for both domestic and foreign investment in critical growth sectors. This stability is essential for long-term planning.
Nomura points out that easing tax bottlenecks could also shorten project timelines. Faster implementation of renewable and defence projects would not only benefit industries but also generate employment opportunities, strengthen supply chains, and contribute to India’s economic growth.
The GST reform aligns closely with India’s sustainability goals. By supporting clean energy projects through reduced financial strain, the government is reinforcing its commitment to reducing carbon emissions and building a greener, more resilient economy.
For defence, the tax changes come at a time when India is emphasizing self-reliance and boosting domestic manufacturing. A more efficient tax framework will enable smoother collaboration between public and private players, helping accelerate innovation and production in the sector.
In summary, Nomura believes the GST restructuring represents a turning point for India’s renewable, solar, and defence industries. By reducing costs, easing compliance, and improving investment confidence, the reform strengthens the foundation for sustainable growth, energy transition, and strategic self-reliance, placing India on a stronger trajectory for future development.
