Tax relief to boost sluggish economy, says Centre; India lowers peak tariffs to improve perception amid Trump’s trade war

India Announces Tax Relief and Lower Import Duties to Revive Economy Amid Global Trade Shakes

In a decisive move to jumpstart economic growth and strengthen its position in turbulent global trade waters, the Indian government on Thursday unveiled a dual strategy of domestic tax relief and reduced import tariffs. The sweeping reforms come as the nation grapples with sluggish consumer demand while positioning itself as an attractive alternative for global businesses caught in the crossfire of the U.S.-China trade tensions.  

The Finance Ministry's new measures include reduced GST rates on daily essentials and targeted incentives for small and medium enterprises, aimed at putting more purchasing power back in consumers' hands. "This is about creating immediate economic stimulus while laying groundwork for sustainable growth," explained a senior official involved in the policy rollout. Market analysts suggest the cuts could provide much-needed oxygen to struggling sectors like automobiles and consumer durables that have seen prolonged demand droughts.  

Simultaneously, New Delhi slashed peak customs duties on electronics, industrial machinery and select raw materials – a calculated play to boost manufacturing competitiveness. Trade experts view this as India's strategic response to the shifting global trade landscape, where companies are actively diversifying supply chains away from China. "The tariff rationalization makes Indian factories more cost-competitive just as multinationals are scouting for new production bases," noted international trade consultant Nandita Choudhary.  

The policy shift carries particular significance against the backdrop of renewed trade uncertainties under the Trump administration's America-first policies. Commerce Ministry insiders reveal the moves are carefully timed to capitalize on growing international skepticism about over-reliance on Chinese manufacturing. "We're presenting India as the stable, business-friendly alternative in this global reshuffling," said a government spokesperson, highlighting recent efforts to streamline business regulations.  

While industry chambers have largely welcomed the announcements, the opposition has sounded cautionary notes. Some parliamentarians warn of potential damage to domestic manufacturers facing cheaper imports, calling for safeguards to protect local employment. The debate has put the government's balancing act under scrutiny – how to attract foreign investment while nurturing homegrown industries.  

Export-oriented businesses and startups appear to be early beneficiaries, with many reporting immediate relief from lower input costs. "This could be the catalyst that helps Indian exporters regain their edge in key markets," remarked Priya Malhotra of the Federation of Indian Exporters. The government has hinted at more reforms in coming weeks, particularly around trade facilitation and tax compliance simplification.  

As economists pore over the fine print to gauge the measures' potential impact, the broader question remains whether this package can provide the necessary spark to reignite India's economic engines while securing its place in an increasingly fragmented global trading system. With major economies bracing for possible recessions, New Delhi's latest moves represent both an economic stimulus and a strategic positioning – one that could determine India's role in the next chapter of globalization.