Motorcycle Rider, 19 Years Old, Dies after Falling 21 Meters from a Flyover near Shah Alam, According to Police Reports
In a bid to boost domestic consumption and potentially offset tariff risks, Indian Prime Minister Narendra Modi has proposed a reduction in the goods and services tax (GST). The announcement comes at a critical juncture, as US-India ties reach a multi-decade low and political battles loom on the horizon.
Under the current GST structure, goods are taxed under a complex four-tier system, with rates ranging from 5% to 28%. However, Modi's reforms aim to simplify this structure, with most goods falling into just two tiers, taxed at either 5% or 18%. This move is expected to make various goods cheaper for consumers, including small cars and air conditioners.
Analysts at Emkay Global Financial Services have hailed the policy as a "welcome reform towards boosting domestic consumption". The GST proposal now rests with the GST Council, which includes state government representatives. If approved, the cuts could help Modi's standing among the middle class and potentially mitigate the impact of any potential US tariffs.
However, the proposed GST cuts are estimated to reduce tax collections by between USD$13 billion and USD$17 billion. This could strain public finances, according to experts. Furthermore, the state of US-India trade negotiations remains uncertain, with US negotiators reportedly postponing a planned late-August visit to the Indian capital.
The US President, Donald Trump, has threatened to double import duties on India to punish New Delhi for buying oil from Russia. The impact of these tariffs on ordinary Indians will depend on the progress towards a Russia-Ukraine peace deal and alternative oil suppliers before the US president's August 27 deadline.
New Delhi's stance on Russian oil imports will become clearer by late September. Indian refiners are showing growing interest in US, West African, and Latin American crude, but Russian flows remain a core part of India's crude basket.
The proposed GST cuts are not without political implications. The announcement comes ahead of expected elections in Bihar, a key political battleground for Modi. The elections, scheduled for October and November, will test the popularity of Modi's reforms and his ability to navigate the complexities of domestic and international politics.
In the midst of these challenges, Modi's GST announcement serves as a testament to his commitment to economic reform and his ambition to bolster domestic consumption. The success of these reforms will be closely watched by economists, analysts, and voters alike, as India navigates a tumultuous geopolitical landscape.
Read also:
- Lu Shiow-yen's Challenging Position as Chair of the Chinese Nationalist Party (KMT) Under Scrutiny in Donovan's Analysis
- Potential Democratic Contenders for Presidency in 2028 Yet to Exclude Themselves from Race
- India's Unexpected Strategies Amidst Controversy Surrounding Bihar's Police Chief: Will They Bear Fruit for Shikha Mukerjee?
- Seventy-eight individuals forcibly returned to Afghanistan perish in bus collision
