Modi dangles cuts as tariffs loom

INDIAN Prime Minister Narendra Modi’s push to slash consumption taxes on everyday goods could deliver billions of dollars in annual relief and boost demand in an economy bracing for painful US tariffs, experts say.

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US President Donald Trump has threatened to double import duties on India from 25 to 50% to punish New Delhi for buying oil from Russia, saying the purchases help Moscow fund its invasion of Ukraine.

The prospective measure has clouded the outlook for the world’s fifth-largest economy, with Indian exporters warning of plunging orders and severe job losses.

New Delhi has called Washington’s move “unfair, unjustified and unreasonable” but is already seeking to cushion the blow, with Modi last week promising to “bring down the tax burden on the common man” during an annual speech to mark India’s independence.

His proposed cuts to the goods and services tax (GST) would make everything from small cars to air conditioners cheaper for consumers, economists say.

Currently, the tax operates under a complex four-tier structure, with rates ranging from five to 28%.

Under Modi’s reforms, most goods would fall into just two tiers, taxed at either five or 18%.