US EditionModi's tax overhaul to strain finances but boost image amid US trade tensions
India's GST overhaul cuts the highest 28% tax slab, lowering many goods to 5%, projected to boost GDP by 0.6 percentage points but reduce government revenue by $20 billion annually.
- On Saturday, Prime Minister Narendra Modi launched India's biggest tax overhaul, cutting GST to make essentials and electronics cheaper from October.
- The United States raised tariffs to 50%, and talks collapsed earlier this month, prompting India to implement tax cuts to protect producers and consumers.
- IDFC First Bank says the overhaul will boost India's GDP by 0.6 percentage points over 12 months but will cost US$20 billion annually, while India Ratings & Research forecasts private final consumption will expand by 6.9%.
- Critics argue the timing is politically motivated, and IDFC First Bank says the cuts will reduce government revenues by nearly $20 billion annually, while BJP posted on X that 'a brighter gift of simpler taxes and more savings is waiting for every Indian' on Diwali.
- A leading bank projects India's GDP could grow 0.6% faster over the next year, despite increasing budget pressures, with Bihar scheduled for elections later this year.
15 Articles
15 Articles
Modi Bolsters India's Economy With Tax Cuts Ahead of US Tariffs
(Bloomberg) — India expects consumption tax cuts announced by Prime Minister Narendra Modi will give a boost to the economy without hurting the government’s fiscal deficit, helping to offset the fallout from higher US tariffs.
Modi Bolsters India’s Economy With Tax Cuts Ahead of US Tariffs
India expects consumption tax cuts announced by Prime Minister Narendra Modi will give a boost to the economy without hurting the government’s fiscal deficit, helping to offset the fallout from higher US tariffs.
India’s Modi plans tax overhaul amid US trade tensions
Indian Prime Minister Narendra Modi unveiled sweeping tax reforms that could boost his image in the face of a US trade war, but strain government revenue, analysts said.The changes are set to make daily essentials like electronics cheaper; Modi also called on Indians to buy more domestically made goods, echoing calls from his supporters to boycott US products after Washington’s tariff hike on Indian imports.The timing of the overhaul is “purely …
In India, the Modi government has just announced this Saturday the biggest reduction in taxes in eight years on consumer products and services. The Prime Minister's camp is trying to reshape its image tarnished by the bad trade agreement with the United States, before a crucial election.
Modi's Tax Overhaul to Strain Finances But Boost Image Amid US Trade ...
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