Скачать или смотреть Trump's 50% Tariff on India Takes Effect as Modi Pushes Self-Reliance

Trump's 50% Tariff on India Takes Effect as Modi Pushes Self-Reliance
#donaldtrump #pmmodi #unitedstatesofamerica #tariffwar

Donald Trump's steep 50% tariffs on India have kicked in, weeks after an executive order imposing an additional 25% penalty over India's purchases of Russian oil and weapons. This makes India, one of the US's strongest Indo-Pacific partners, one of the countries facing the highest tariffs globally, potentially hurting exports and growth, as the US was recently India's largest trading partner.

The tariff blow has put the Indian government into action. Prime Minister Narendra Modi promised tax cuts to mitigate the impact and urged domestic self-reliance. During Independence Day celebrations at Delhi's Red Fort, he called on small businesses to display “Swadeshi” or “Made in India” boards, saying, “We should become self-reliant—not out of desperation, but pride.” He has repeated this message in other public addresses this week.

The tariffs threaten millions of livelihoods across India's export-driven industries supplying clothes, diamonds, and shrimp to the US. Modi’s message: make in India, spend in India. Manufacturing’s share of GDP remains at 15%, despite subsidies and incentives, making tax reforms crucial to boost immediate consumption.

Following a $12bn income tax giveaway earlier this year, Modi now aims to overhaul indirect taxes by simplifying the GST into a two-tier system. Analysts from Jeffries estimate the reforms could be worth US$20bn, boosting consumption alongside April 2025 income tax cuts.

Private consumption drives nearly 60% of India’s GDP. While rural spending remains strong, urban demand has slowed due to lower wages and job cuts, especially in IT post-pandemic. Morgan Stanley predicts Modi’s fiscal stimulus will revive consumption, raise GDP, and lower inflation amid global geopolitical and tariff challenges.

Consumer-facing sectors like scooters, small cars, garments, and cement are expected to benefit most. Analysts say GST cuts will have a larger “multiplier effect” than previous corporate and income tax cuts, directly boosting consumer spending at the point of purchase, according to UBS.
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