Summary
India has reduced taxes on many consumer products, including toothpaste, soap, small cars, and electronics, to boost domestic demand. This move is in response to economic challenges from high tariffs on Indian goods imposed by the U.S. The tax cuts are part of a broader reform to simplify India's tax system, which also includes raising taxes on luxury items.
Key Facts
- India cut taxes on consumer goods to boost spending and help the economy.
- This decision follows high U.S. tariffs on Indian goods, introduced by President Trump.
- The Goods and Services Tax (GST) system in India was simplified from a four-rate to a two-rate structure.
- Taxes on basic items like toothpaste and shampoo dropped from 18% to 5%.
- Taxes on small cars, air conditioners, and TVs were reduced from 28% to 18%.
- Luxury goods, such as high-end cars and cigarettes, now have a 40% tax.
- The tax changes are expected to reduce government revenue by 480 billion Indian rupees.
- These reforms align with Prime Minister Modi's push for more self-reliance and economic growth in India.
