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India slashes taxes to blunt US tariff shock with Modi’s ‘double Diwali’
The overhaul will cut the top GST rate from 28 to 18 per cent, making cars, air con units and fridges cheaper in a bid to boost consumption
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Faced with punishing US tariffs, Indian Prime Minister Narendra Modi has sought to turn crisis into opportunity, unveiling a historic tax overhaul that he says will deliver a “double Diwali” for households and businesses alike.
In a wide-ranging Independence Day address on August 15, Modi unveiled the most significant revamp of India’s Goods and Services Tax (GST) in a decade – pitched as both an economic stimulus and a political statement of resilience.
It comes after US President Donald Trump’s administration imposed tariffs of up to 50 per cent on Indian exports earlier this month, a move widely seen as a reversal of Washington’s courtship of New Delhi. From garment exporters to furniture sellers, Indian firms had been scrambling to absorb the shock.
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Then Modi, in one of his longest national addresses to date, unveiled a sweeping cut to consumption taxes to rally consumers. “This Diwali, I am going to make it a double Diwali for you,” he declared to millions of television viewers, referring to the major Hindu festival which will be celebrated in October this year.
This Diwali, I am going to make it a double Diwali for you
“We are bringing next-generation GST reforms. This will reduce the tax burden across the country.”
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