Budget 2024: Helmet Manufacturers expect GST Cuts as Two Wheeler Accidents Spike

In response to the alarming number of lives lost in two-wheeler accidents on Indian roads, manufacturers of two-wheeler helmets are urging the government to consider reducing the Goods and Services Tax (GST) from the existing 18 percent to a more reasonable 12 percent. The President of the Two-Wheeler Helmet Manufacturers Association emphasized the crucial role helmets play as life-saving devices, advocating for a lower GST rate. “We have formally communicated to the government that the GST on helmets should be reduced to 12 percent.

By doing so, customers would gain access to high-quality helmets at a more affordable price,” he stated. Recent data from the Ministry of Road Transport and Highways (MoRTH) underscores the severity of the issue, revealing that two-wheelers contribute to 42 percent of accidents and 41 percent of fatalities in road accidents. In 2022 alone, MoRTH reported a total of 151,997 accidents, with two-wheelers involved in 63,115 cases—a 20 percent increase from 2021. Similarly, fatalities from two-wheeler accidents rose by 11 percent, reaching a total of 61,038 in 2022, with 25,228 attributed to such incidents.

Despite these concerning statistics, only 30 percent of riders in India currently wear helmets. Although helmets are not compulsory nationwide, there are expectations that the government will gradually enforce this requirement. Some states have already mandated the provision of two helmets with each motorcycle, following the guidelines of the motorcycle act.

The helmet industry, particularly the branded segment, is witnessing substantial growth. Companies like Steelbird are projected to experience a 30 percent growth due to innovative product launches. Despite a dip in sales during the Covid-19 pandemic, the market is rebounding, with sales reaching 22.05 million units in 2022 compared to 13.9 million in 2020 and 20.5 million in 2021.

Looking ahead, Steelbird is investing Rs 105 crore in expanding its Baddi plant, with production capacity set to increase from 13,000 to 15,000 helmets per day. This expansion aligns with the positive trajectory in helmet sales and the increasing market demand for branded helmets.

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