Business
As Trump’s Tariffs Take Effect, How India Has Toughened Up To Tackle The Challenge
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PM Modi has already outlined a new strategy to stand up to the US, vowing no compromise on protecting India’s agro- and labour-intensive sectors in any new trade agreements
India is resilient and prepared to confront challenges in the face of the massive tariffs imposed by President Donald Trump, sources said. File image/PTI
The message from the Narendra Modi government to the world, and particularly to Indian citizens and the United States, is clear: India is resilient and prepared to confront challenges in the face of the massive tariffs imposed by President Donald Trump. Citing its history of emerging stronger from crises like post-nuclear sanctions and the recent Covid-19 pandemic, the government asserts that India’s economic fundamentals remain robust, making it one of the world’s fastest-growing major economies.
This confidence is reflected in the positive assessments from global rating agencies. S&P Global recently upgraded India’s sovereign rating, while Fitch Ratings has affirmed a stable outlook. Both agencies have projected a strong growth trajectory for India, with Fitch forecasting a 6.5% rise in the country’s GDP for the fiscal year ending March 2026.
Despite this reassuring outlook, the government is not complacent, sources said. Recognising the concerns of exporters, particularly small-scale industries involved in sectors like jewellery and textiles, the Reserve Bank of India (RBI) is closely monitoring the situation. RBI governor Sanjay Malhotra has made it clear that the central bank will not be a passive spectator if the high tariffs begin to have a substantial impact on the economy. To mitigate the effects, the RBI could potentially slash the repo rate and expedite the implementation of BASEL 3 norms, which would facilitate credit and improve ratings for exporters and other stakeholders.
In addition to monetary policy, sources said the government is also planning a reworked export package that could offer new incentives, credit lines, and protection for the export sector.
Meanwhile, India is actively diversifying its trade portfolio to counter potential market losses in the US. A significant milestone has been the signing of the India-EFTA (European Free Trade Association) agreement, which includes Norway, Iceland, and Switzerland. This agreement is set to come into effect within a month. Furthermore, negotiations with the European Union (EU) are now at an advanced stage. The government views these agreements as major opportunities, especially given that the combined trade in goods of the UK, EFTA, and EU was approximately $16 trillion in 2024, nearly one-third of the total global trade.
Several concerns have been raised by textile industries that are worried about their future. This is where a new plan is being chalked out. Sources say the government could launch an outreach programme in key textile markets to counter the impact of the 50 per cent tariffs and increase its share of exports in the global market in the coming months, with a focus on Japan, the EU, the UK, and other EFTA countries.
Prime Minister Narendra Modi has already outlined a new strategy to stand up to the US, vowing no compromise on protecting India’s agro– and labour-intensive sectors in any new trade agreements. The government’s two-pronged approach focuses on “Atmanirbharta” (self-reliance) to reduce imports and “Swadeshi” (domestic products) to create a strong market for indigenous manufacturers. The government remains confident that through these measures, India will stand strong and navigate any global economic headwinds successfully.
Pallavi Ghosh has covered politics and Parliament for 15 years, and has reported extensively on Congress, UPA-I and UPA-II, and has now included the Finance Ministry and Niti Aayog in her reportage. She has als…Read More
Pallavi Ghosh has covered politics and Parliament for 15 years, and has reported extensively on Congress, UPA-I and UPA-II, and has now included the Finance Ministry and Niti Aayog in her reportage. She has als… Read More
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The Oil and Gas Regulatory Authority (OGRA) has approved a fresh increase in the price of liquefied petroleum gas (LPG), raising the cost for both domestic consumers and commercial users.
According to the notification issued, the LPG price has been increased by Rs7.39 per kilogram, setting the new rate at Rs209 per kg for December. As a result, the price of a domestic LPG cylinder has risen by Rs87.21, bringing the new price to Rs2,466.10.
In November, the price of LPG stood at Rs201 per kg, while the domestic cylinder was priced at Rs2,378.89.
The latest price hike is expected to put additional pressure on households already grappling with rising living costs nationwide.
New Delhi: The taxable value of all supplies under GST surged by a robust 15 per cent during September-October this year, compared to the same period in 2024 due to sharp increase in consumption triggered by the tax rate cuts on goods across sectors that kicked in from September 22, according to official sources.
The growth in the same two-month period last year was 8.6 per cent. “This surge in taxable value during ‘Bachat Utsav’ demonstrates strong consumption uplift, stimulated by reduced rates and improved compliance behaviour,” a senior official said.
He pointed out that the growth has especially been strong in sectors where rate rationalisation was implemented, such as FMCG, pharma goods, food products, automobiles, medical devices and textiles. In these sectors, the taxable value of supplies has seen significantly higher growth, confirming that lower GST rates translated directly into higher consumer spending.
“It vindicates our strategy that reducing rates on essentials and mass-use sectors would create demand-side buoyancy — a Laffer Curve–type demand uplift,” he explained.These trends confirm that GST next-gen reforms have not disrupted revenue stability, and that consumption-side buoyancy has begun to translate into higher taxable value in key sectors.
This growth is in value terms which means that since GST rates were lower, the growth in volume terms will be even higher. It is clearly visible that while the Next Gen Reforms resulted in significant Bachat — increased consumption, industry has been very proactive in passing on the GST savings to the final consumers and ensuring that there is no supply side deficiency.
As GDP private consumption data will be released much later, GST taxable value serves as the most reliable real-time proxy for consumption, and the current numbers clearly indicate sustained demand expansion, the official added.
Business
Private sector data: Over 2 lakh private companies closed in 5 years; govt flags monitoring for suspicious cases – The Times of India
NEW DELHI: The government on Monday said that over the past five years, more than two lakh private companies have been closed in India.According to data provided by Minister of State for Corporate Affairs Harsh Malhotra in a written reply to the Lok Sabha, a total of 2,04,268 private companies were shut down between 2020-21 and 2024-25 due to amalgamation, conversion, dissolution or being struck off from official records under the Companies Act, 2013.Regarding the rehabilitation of employees from these closed companies, the minister said there is currently no proposal before the government, as reported by PTI. In the same period, 1,85,350 companies were officially removed from government records, including 8,648 entities struck off till July 16 this fiscal year. Companies can be removed from records if they are inactive for long periods or voluntarily after fulfilling regulatory requirements.On queries about shell companies and their potential use in money laundering, Malhotra highlighted that the term “shell company” is not defined under the Companies Act, 2013. However, he added that whenever suspicious instances are reported, they are shared with other government agencies such as the Enforcement Directorate and the Income Tax Department for monitoring.A major push to remove inactive companies took place in 2022-23, when 82,125 companies were struck off during a strike-off drive by the corporate affairs ministry.The minister also highlighted the government’s broader policy to simplify and rationalize the tax system. “It is the stated policy of the government to gradually phase out exemptions and deductions while rationalising tax rates to create a simple, transparent, and equitable tax regime,” he said. He added that several reforms have been undertaken to promote investment and ease of doing business, including substantial reductions in corporate tax rates for existing and new domestic companies.
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