PM Modi announced GST reforms during his Independence Day speech, under which, the government plans to reduce GST on most goods and services, helping increase India’s consumer demand.
New Delhi: In a significant step towards mitigating the impact of the US tariffs announced on Indian exporters, the government of India, led by Prime Minister Narendra Modi is taking some steps which would provide immediate relief to the Indian consumer demand and stop the US tariffs from making a significant impact on India’s growth story. For those unversed, US President Donald Trump imposed an additional 25% tariff on Indian goods, raising the total tariff to 50% from August 27. Keeping in mind India’s exports to the US, the tariffs are expected to make it difficult for Indian exporters, especially in textiles, jewelry, and footwear to compete with US domestic products and exports from other countries like China and Vietnam. Here are all the details you need to know on how the PM Modi government planning to counter the impact of US tariff impact on the India economy.
How is Modi government planning to counter US tariff impact?
In order to mitigate the impact on US tariffs on Indian economic growth, Prime Minister Narendra Modi announced GST reforms during his Independence Day speech, under which, the government plans to cut the current four GST slabs down to two, with essentials like food and clothing likely shifting to the lower 5% rate, in a move, which is expected to boost domestic demand and provide relief to consumers.
Read more: Good news for India as Fitch Ratings affirms India’s credit rating, says US tariffs will only…
Story highlights:
- US has imposed a heavy 50% tariff on the Indian exports to the US.
- As a result, India’s economy is expected to take an economic hit.
- However, in order to mitigate the risks, India is taking several steps.
- One among them is the recently announced GST reduction on several goods and services.
What do global agencies say on impact of US tariffs on India’s growth?
In a matter of good news for India, Fitch Ratings affirmed India’s credit rating at ‘BBB-‘ with a stable outlook, supported by the country’s robust economic growth and solid external finances.
“We forecast GDP growth of 6.5 per cent in the fiscal year ending March 2026 (FY26), unchanged from FY25, and well above the ‘BBB’ median of 2.5 per cent,” Fitch Ratings said in a report.
(With inputs from agencies)
