Modi gives tax boon to India’s economy amid Trump tariff tensions
Indian Prime Minister Narendra Modi is at the country’s independence day at the Red Fort in Red Fort in New Delhi, India, on Friday, August 15, 2025.
Bloomberg | Bloomberg | Getty Images
Indian markets were collected on Monday because the tax cuts of Prime Minister Narendra Modi recently gave a gift to a domestic economy encountering the teeth of US tariffs.
Nifty 50 index progressed by 1%, BSE Sensex added 0.84%. In currencies, the US dollar surrendered by 0.18% against the Rupiye.
Prime Minister Narendra Modi is compatible with a comprehensive independence day speech on Friday be confident And proposed a series of financial reforms. The new Delhi plans a 5% and 18% structure under comprehensive changes in the goods and services tax (GST) regime and plans to eliminate the previous 12% and 28% tax applied to some items. Reuters Quote A government official says on Friday. In the news Reported by local media.
“Reforms aim to simplify compatibility, reduce tax rates and modernize the GST framework to make more growth -oriented. Industrial managers, rationalization of two plates, micro, small and medium -sized enterprises (MSMES) rationalization of measures such as rationalization, use technology -driven processes, using technology -driven processes,” Production, ” Logistics can earn housing and consumer goods.
India’s automobile industry may also emerge as one of the beneficiaries of new tax policies after a still stretch in recent months. The sales of India’s passenger vehicles containing cars were added 4.2% in the 2024 calendar year, Indian Car Manufacturers Association He said in January – The slowest growth tempo in four years, According to Reuters.
Maruti Suzuki India added 8.75%, while the Hyundai Motor India increased by 8.15%, while the automobile industry has increased in Monday session.
“It is absolutely positive about the announcement and the fact that the automatic sector is a relative delay in the last quarter, so it is not surprising to see that the sector has returned quite strongly,” He said.
Modi’s tax revision can increase the Indian economy in the 2025-2026 financial year of India Reserve Bank, which has increased by Washington’s “mutual tariffs” in the deep geopolitical uncertainty period. In particular, the new Delhi fell into plus signs of US President Donald Trump’s administration on ongoing Russian crude oil purchases, and Washington brought 25% more tax to Indian imports due to the entry into force at the end of this month – brought total tasks to 50%.
“India is an internal consumption story. Exports make a relatively small contribution. [tax overhaul] Thom from Aberdeen is more than balancing this effect. “He said.
“Certainly, certainly, the changes in the GST regime will be supportive for consumption as it emerged later in the year. And consumption has been weak for a long time, so this is a real increase in India’s economy, if you want, the Indian economy is very dependent on domestic consumption.”
Domestic procurement is “one of the most challenging indicators that investors closely followed” and “the greatest driving force of economic growth in India” with the contribution of 61.4% in the 2024-25 fiscal year. Deloitte said in an August report.
“In particular, a change in luxury goods in urban consumption and expenditure preferences emerges as the basic poles of this momentum,” he said.
By the way, Indian ratings and research India’s special final consumption rate estimates The financial year until the end of March 2026 will expand by 6.9% annually and will leave a wider GDP growth look behind low real wage increases during the period, decreasing household savings and support personal loans.
“A sharp decrease in inflation has developed expectations of stable consumption growth in 26 fiscal years.” India’s retail inflation has increased from 4.31% to the lowest level in January 2017.
