Modi pushes two-tier GST amid US tariffs on Indian goods

Facing a new round of heightened global trade tensions, Prime Minister Narendra Modi said India will not compromise on the interests of farmers, cattle rearers, and small-scale industries as the United States moves to impose 50 percent tariffs on a broad swath of Indian goods. In Ahmedabad, Modi framed the moment as a test of national resilience and urged a renewed emphasis on Made in India products and swadeshi purchasing, signaling that domestic consumption and self-reliance would be central to managing the impact of the US measures.

At the heart of Modi’s address was a proposal to overhaul India’s Goods and Services Tax system to reduce complexity and broaden relief for households. The plan would convert the current four-tier GST structure, with rates from 5 to 28 percent, into a two-tier regime, with most goods taxed at 5 percent or 18 percent. If enacted by the GST Council, the change would move many items from the top 28 percent rate to 18 percent and shift a large share of mid-range goods into the 5 percent bracket. Economists say the reform could boost consumer demand and provide a much-needed stimulus as the economy confronts headwinds from international tariff threats.