According to experts, Indian Prime Minister Narendra Modi’s initiative to lower consumption taxes on common commodities might increase demand and provide billions of dollars in annual respite in an economy preparing for severe US tariffs.
In retaliation for New Delhi’s purchases of oil from Russia, US President Donald Trump has threatened to boost import charges on India from 25% to 50%, claiming that the imports aid Moscow in financing its invasion of Ukraine.
Indian exporters have warned of a sharp decline in orders and a significant loss of jobs as a result of the proposed policy, which has clouded the outlook for the fifth-largest economy in the world.
Despite calling Washington’s action “unfair, unjustified, and unreasonable,” New Delhi is already attempting to lessen the impact. In an annual speech to commemorate India’s independence, Modi pledged last week to “bring down the tax burden on the common man.
According to analysts, his planned reductions in the goods and services tax (GST) will lower the cost of everything for consumers, from air conditioners to small vehicles.
With rates ranging from 5% to 28%, the tax now has a complicated four-tier structure. The majority of items would only be subject to two tax rates under Modi’s reforms: 5% and 18%.
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